Avalara AvaTax [GP]

Set up Avalara AvaTax

Avalara AvaTax must be already installed in your Microsoft Dynamics GP system. Avalara provides full resources that walk you through installation and configuration of Avalara AvaTax for Microsoft Dynamics GP: Avalara for Microsoft Dynamics GP Implementation and Avalara Help Center for Microsoft Dynamics GP.

This article provides the description of some core settings necessary for Sana to work with Avalara AvaTax in Microsoft Dynamics GP. Sana does not have any specific settings which must be configured for Avalara AvaTax. It uses the standard functionality. Therefore, you must set up Avalara AvaTax according to your business needs. For more detailed information about how to set up Avalara AvaTax in Microsoft Dynamics GP, refer to the official Avalara documentation.

In Microsoft Dynamics GP click: Tools > Setup > System > Avalara AvaTax > Configuration.

Security

Check that the Connection Settings are filled in. These are your Avalara AvaTax account credentials which you entered with the Setup Assistant during installation of Avalara AvaTax for Microsoft Dynamics GP.

Click Test Connection to check that the connection settings are correct.

General

Step 1: Avalara provides tax codes that determine the taxability of the products you sell. Tax codes identify the category that a product belongs to and determine the tax rules that apply to a product. If you are selling products that need to use a different code or products that require special tax treatment, then you can change the tax code for those products.

To be able to map items to the Avalara tax codes you should select Taxability in the Tax Code Mapping field.

If you need to add Avalara tax codes to item classes, then select the Enable Item Class Mapping checkbox and select Taxability in the Item Class Mapping field.

Also, make sure that the necessary tax code is added to the item. Open the Item Maintenance window and select the item. Then, click Options and enter the tax code in the Taxability field.

Do the same for item classes, in case you use them. If there is no tax code on the item, the one from the item class will be used. Item tax code mapping takes precedence over item class tax code mapping.

Step 2: You can also calculate Avalara taxes for shipping and payment services - whether a shipping or payment is taxable or exempt based on jurisdiction and tax rules.

To calculate taxes for the shipping method, select the necessary code in the Default Shipping Code field.

To calculate taxes for the payment method, select the necessary code in the Default Miscellaneous Code field.

Tax Calculation

Step 1: Make sure that the checkbox Disable Tax Calculation is not selected. If you select it, then Avalara will not be used to calculate tax on transactions.

Step 2: Select the checkbox Always check addresses before calculating tax in case you need to force address validation before tax is calculated.

 NOTE

Avalara recommends not to enable this option as it may lead to extra charges.

Step 3: Select the default tax schedule in the Tax Schedule ID field. The following options are available: AVATAX and AVATAX-M.

Step 4: Click on the button Set Tax Schedule ID. Using the AvaTax Tax Schedule Update window, you can update the customer records with the necessary AvaTax tax schedule ID.

You need to select the Tax Schedule ID, in our case it is AVATAX. Then, select the country and the range of customers. The customers are filtered based on the selected country. Using AvaTax Update Tax Schedule Utility, you can change the tax schedule ID of the selected customers to the one used by AvaTax to calculate tax.

If you select the checkbox Update all child records associated with master records, then all shipping addresses available for the selected customers will be also updated with the AvaTax tax schedule ID.

You can also set the AvaTax tax schedule ID for a customer and customer's shipping addresses directly in the Customer Maintenance window.

Open the necessary customer and use the Tax Schedule ID field to add AvaTax tax schedule ID.

To add AvaTax tax schedule ID to the customer's shipping address, in the Customer Maintenance window click on the Address ID and use the Tax Schedule ID field.

Address Validation

If you want to validate addresses, you should not select the checkbox Disable Address Validation. Sales tax might be calculated incorrectly if this option is disabled.

Then, to perform address validation based on the country names, select countries on the left and move them to the box on the right using the arrow.

To validate customer address manually, open the Customer Maintenance window and select the necessary customer. Then click: Additional > AvaTax Address Validation. See the examples below.

If a customer has several addresses, you can validate all of them one by one from the Customer Address Maintenance window.

Correct customer address

Incorrect customer address

This is briefly about some of the core Avalara AvaTax settings in Microsoft Dynamics GP. For more information about how to install and set up Avalara AvaTax in Microsoft Dynamics GP, please refer to the official Avalara documentation. Below you can see some useful resources:

Avalara AvaTax for Microsoft Dynamics GP Implementation
Avalara AvaTax Settings in Microsoft Dynamics GP
Avalara Help Center for Microsoft Dynamics GP
Avalara AvaTax Tax Codes for Goods and Services