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Avalara AvaTax

Avalara AvaTax

Avalara is a third-party tax engine service that is useful when you have nexus in multiple locations. It holds up-to-the-minute tax rate data for thousands of sales tax jurisdictions around the world. Avalara automatically calculates the correct tax rates for your invoices by taking into account a variety of tax conditions including your nexus, the customer's location, tax types and tax rules. 

It is particularly useful for customers who:

  • Operate in a large number of tax jurisdictions, either across the U.S. or globally.
  • Deal with many tax types and complicated tax rules.
  • Update thousands of different tax rates every month.
  • Submit tax reports for multiple tax jurisdictions with different deadlines and procedures.

The tax engine handles the update process for you, removing the need for you to update new tax rates manually. You may already use Avalara in your business, and by leveraging the integration with Zuora you avoid having to maintain tax rates in multiple locations.

Avalara also helps to manage address changes. For example, if an unincorporated area annexes to a city or county, Avalara is responsible for incorporating these updates. The service can also provide tax advice and value added services such as generating and submitting tax reports.

Secured Communication Between Zuora and Avalara

The Avalara AvaTax integration is a server-to-server communication between Zuora and Avalara servers. The connection is through the Transport Layer Security (TLS) protocol. All customer credentials are protected and follow industry best practices.

Zuora is tightly integrated with the Avalara tax engine, and can calculate ax rates when performing billing operations in bill runs and API calls. By connecting your Avalara account to Zuora you can:

  • Calculate tax rates in bill runs.
  • Calculate tax rates in all SOAP API calls that generate an invoice; subscribe(), amend() and generate().
  • Calculate tax rates in all REST API calls that generate an invoice.
  • Preview taxes in subscribe() and amend() SOAP API calls and various REST API calls.
  • Calculate values for invoice item adjustments (IIA) through the Zuora UI and SOAP API. This is only for the invoice items with the Charge or Discount processing type. See Avalara Taxes in Invoice Item Adjustments for more information.

If required, it is possible to configure Avalara to calculate taxes for some of your rate plan charges, and use Zuora Tax or another third party tax engine for other rate plan charges. A single invoice can contain items taxed by two or more tax engines.

To start using Avalara to calculate your tax rates, see Configure Integration with Avalara.

When integrated with the Avalara tax engine, your company code will be used as the tax code for calculating tax.

Tenants with Avalara enabled can pass a Value Added Tax ID to Avalara. You can use Avalara to calculate taxes according to European Union tax rules.