Avalara AvaTax Integration

Avalara AvaTax is a cloud-based sales tax compliance solution that automates tax calculation, filing, and remittance for businesses of all sizes. The integration with Pulse Commerce provides seamless, real-time tax calculations on every order.

What is Avalara AvaTax?

AvaTax is a powerful online sales tax compliance solution that provides businesses with a level of sales tax automation previously available only to Fortune 500 companies. Through its transaction-based service model and seamless integration with Pulse Commerce, AvaTax gives you rapid access to:

• Real-time sales tax calculations in tenths of a second with absolute accuracy
• Automatic jurisdiction assignments based on precise address geocoding
• Up-to-date tax rates across all US states, counties, cities, and special tax districts
• Product taxability rules for different categories (clothing, groceries, digital goods, etc.)
• Tax holiday tracking and special exemption period handling
• Certificate management for tax-exempt customers and resellers

Key Benefits of the Avalara Integration:

Accuracy and Compliance

• Eliminates manual tax rate management and human error
• Automatically accounts for changing tax laws and rate updates
• Calculates tax based on the exact shipping address (rooftop accuracy)
• Handles complex multi-jurisdictional tax scenarios automatically

Operational Efficiency

• No need to maintain tax tables or track rate changes
• Reduces time spent researching tax requirements
• Simplifies multi-state expansion without tax configuration burden
• Transaction-level detail for audit defense and reporting

Advanced Tax Logic

• Manages situs (sourcing) rules for origin vs. destination-based states
• Handles nexus determination and multi-state compliance
• Applies product-specific tax codes and exemption rules
• Supports international tax calculation (for supported countries)

How the Integration Works:

When an order is placed in Pulse Commerce with Avalara AvaTax enabled:

1. Customer completes their order with a shipping address
2. Pulse Commerce sends order details to Avalara's API in real-time:
   • Ship-from address (your fulfillment location)
   • Ship-to address (customer's address)
   • Product information and tax codes
   • Customer code (for tax-exempt or special tax treatment)
   • Order subtotal and line item details
3. Avalara calculates the exact tax based on current rates and jurisdictions
4. Tax amount is returned to Pulse Commerce and applied to the order
5. Transaction is recorded in your Avalara account for reporting and filing

This entire process happens in tenths of a second, providing accurate tax calculation without any delay in the checkout process.

Before you can enable Avalara AvaTax in Pulse Commerce, several prerequisites must be completed. This section outlines what needs to be in place before configuration.

Required Steps (Completed by Pulse Commerce):

1. Avalara AvaTax Add-On Module Purchase

• The Avalara integration is a paid add-on module
• Contact your Account Manager to purchase and activate the module
• Partnership rates are available through Pulse Commerce's relationship with Avalara

2. Professional Services Installation

• Pulse Commerce Professional Services must install and configure the Avalara module
• This includes API connection setup and initial configuration
• You will be notified when installation is complete and ready for your configuration

Required Information (To Be Provided by You):

You will need the following information from your Avalara account to complete configuration:

• Avalara Account Number (provided when you sign up with Avalara)
• License Key (authentication credential from your Avalara account)
• Company Code (if you have multiple companies in Avalara, otherwise optional)
• Avalara account login credentials to verify connection and configure tax codes

Avalara Account Setup:

Before configuring the Pulse Commerce integration, you must:

1. Create an Avalara AvaTax account
   • Sign up through Pulse Commerce's partnership program for preferred rates
   • Complete Avalara's onboarding process and company setup
   • Verify your account is in Production mode (not Sandbox/Development)
2. Configure your company profile in Avalara
   • Add your business locations and fulfillment addresses
   • Set up nexus jurisdictions (states where you collect tax)
   • Configure any tax-exempt customer codes you'll use
3. Obtain API credentials
   • Navigate to your Avalara account settings
   • Locate your Account Number and License Key
   • Keep these credentials secure—they will be entered in Pulse Commerce

Once Pulse Commerce Professional Services has completed the installation of your Avalara AvaTax integration module, you can configure your account settings and enable the integration.

Step 1: Enter Avalara Credentials

1Navigate to Settings > Tax Rates in your Pulse Commerce admin panel.

2Click the Edit Settings link next to Calculate State/City/Province/Zip code tax in realtime using Avalara AvaTax on Demand.

3Enter your Avalara credentials:

• Avalara AvaTax Account Number: Your 9-10 digit account number from Avalara
• License Key: Your API license key (treat as a password)
• Company Code: Optional, only if you have multiple companies in Avalara
• Calculate Sales Tax Using One Central Origin: Select Yes for origin-based sourcing (tax from your location) or No for destination-based sourcing (tax from customer's location). Most merchants use destination-based (No).
• Avalara API Mode: Select Production for live orders
• Avalara URL: Pre-populated as https://avatax.avalara.net (do not modify)

4Click Test Connection to verify your credentials. A successful test confirms Pulse Commerce can communicate with your Avalara account.

5Click Submit to save your configuration and enable Avalara.

Avalara AvaTax is now enabled and will calculate tax on all orders automatically.

Pulse Commerce automatically sends customer information to Avalara to enable proper tax treatment for tax-exempt customers and special customer categories.

How Customer Codes Work:

When an order is placed, Pulse Commerce sends a Customer Code to Avalara based on the customer's configuration:

Customer in a Customer Group:

• The Customer Group Name is sent as the Customer Code to Avalara
• Example: Customer in "Wholesale" group → Avalara receives "Wholesale" as the Customer Code

Customer Marked as Tax Exempt (No Customer Group):

• The code "CustExempt" is sent to Avalara
• You must configure "CustExempt" as a tax-exempt code in your Avalara account

Regular Taxable Customer:

• No special customer code is sent
• Avalara calculates standard sales tax based on the shipping address

Configure Tax-Exempt Codes in Avalara:

1Log in to your Avalara AvaTax account at https://admin.avalara.com.

2Navigate to Settings Exemptions Exempt Customers.

3Add "CustExempt" as a tax-exempt customer code.

4Add any Customer Group names you use for tax-exempt customers (e.g., "Wholesale", "Nonprofit", "Government").

5For each exempt customer code, specify the exemption reason, applicable jurisdictions, and certificate requirements.

6Save your configuration.

Mark Customers as Tax-Exempt in Pulse Commerce:

1Navigate to Customers Search Customers and select the customer.

2Click Edit Customer.

3In the Advanced Settings section, set Tax Exempt to Yes - Tax Exempt Entity.

4Click Save Changes.

Product tax codes tell Avalara how to tax specific types of products based on taxability rules that vary by jurisdiction.

What Are Product Tax Codes?

Product tax codes (PTCs) classify products into tax categories. Avalara uses these codes to apply the correct taxability rules for each product type in each jurisdiction.

Common Product Tax Code Examples:

• P0000000 - General tangible personal property (default)
• PC040100 - General clothing and footwear
• PC030000 - Food and food ingredients (groceries)
• PC050000 - Medical equipment and supplies
• D0000000 - Digital goods (software, downloads, streaming)

Assign Product Tax Codes:

1Navigate to Products > Product Catalog Manager and click Edit on a product.

2Click the Simple tab.

3In the Tax Code field (highlighted in yellow), enter the appropriate Avalara Product Tax Code (e.g., PC040100 for clothing).

4Click Update.

Find Product Tax Codes:

Option 1: Avalara Account

• Log in to https://admin.avalara.com
• Navigate to Settings Tax Codes to browse available codes

Option 2: Bulk Import

• Use the Product Item Import Template with Tax Codes for large catalogs
• See the Import/Export section of the knowledge base for detailed instructions

Thoroughly test your Avalara configuration before processing live customer orders.

Test Connection

1Go to Settings > Tax Rates.

2Click Edit Settings next to the Avalara AvaTax on Demand option 

3Click Text Connection.

Test Checkout Scenarios:

Place test orders for the following scenarios:

1. Standard Taxable Order

• Order as a regular customer with a real shipping address
• Verify tax is calculated and matches expected rates

2. Tax-Exempt Customer

• Order as a customer marked Tax Exempt
• Verify NO tax is charged

3. Different Tax Rates by Address

• Place orders to different cities/states
• Verify tax rates change based on location

4. Products with Tax Codes

• Order products with specific tax codes (clothing, food, etc.)
• Verify appropriate tax treatment by product type

Verify Transactions in Avalara:

1Log in to https://admin.avalara.com.

2Navigate to Transactions.

3Verify test orders appear with correct:

• Ship-from and ship-to addresses
• Product tax codes (if applicable)
• Customer codes for tax-exempt customers
• Tax amounts matching Pulse Commerce

4Click individual transactions to view detailed calculation breakdowns showing which jurisdictions' taxes were applied.

Troubleshooting Common Issues:

Tax not calculated at checkout:

• Verify Avalara is enabled at Settings > Tax Rates
• Check connection test is successful
• Ensure Avalara account is active in Production mode

Wrong tax rate applied:

• Verify shipping address is complete with zip code
• Check Origin vs. Destination setting
• Review transaction in Avalara to see calculated jurisdictions

Tax-exempt customers charged tax:

• Verify "CustExempt" is configured in Avalara as tax-exempt
• Check customer group names match exactly (case-sensitive)
• Ensure customer is marked Tax Exempt in Pulse Commerce

How do I sign up for Avalara AvaTax?

Contact your Pulse Commerce Account Manager to sign up for Avalara AvaTax. Pulse Commerce has a partnership with Avalara that provides preferred pricing and streamlined onboarding. Your Account Manager can facilitate the sign-up process and ensure you receive partnership rates.

What are the costs associated with Avalara AvaTax?

Avalara AvaTax is a transaction-based service with monthly fees based on your sales volume. Contact Avalara Support to learn more.

Can I use Avalara for tax filing and remittance, or just calculation?

Avalara offers both tax calculation (AvaTax) and tax filing/remittance services (Managed Returns). The Pulse Commerce integration handles the tax calculation component. If you want Avalara to also prepare and file your returns, this is set up directly with Avalara as an additional service. Contact Avalara Support for details on Avalara's full compliance offerings.

What happens if I need to change an order after the Avalara transaction is locked?

Once a transaction is locked in Avalara (typically after filing your tax return), that specific transaction cannot be modified. If you attempt to edit a locked transaction in Pulse Commerce, you'll receive a notification indicating it's locked. If you need to process a return, refund, or address change, this creates a separate transaction in Avalara with the updated information. The original locked transaction remains unchanged as a historical record tied to your filing period.

Does Avalara work for international orders?

Avalara AvaTax primarily focuses on US sales tax compliance, but Avalara does offer international VAT/GST calculation services for supported countries. The Pulse Commerce integration uses the US AvaTax service. For international tax calculation, discuss your specific requirements with Avalara.

What happens if Avalara's service is down or unavailable?

If Avalara's API is temporarily unavailable, your checkout may experience issues calculating tax. Avalara maintains high uptime (99.9%+ SLA), but if you experience connectivity issues, you can configure temporary fallback tax rates if needed.

Can I still manually override tax on specific orders?

When Avalara AvaTax is enabled, all tax calculations should go through Avalara for compliance and reporting accuracy. If you need to adjust tax on an order after it's placed (for example, for returns or corrections), make these adjustments in your Avalara account rather than in Pulse Commerce. This ensures your Avalara transaction records remain accurate.

How do I handle tax-exempt certificates with Avalara?

Avalara offers a Certificate Management tool (CertCapture) to collect, store, and manage exemption certificates digitally. While this is a separate service from AvaTax calculation, it integrates with your Avalara account. Certificates can be uploaded manually or collected automatically. Contact Avalara to enable certificate management features.

Will Avalara calculate tax on shipping charges?

Yes, if shipping is taxable in the destination jurisdiction, Avalara will automatically include shipping charges in the tax calculation. This is handled automatically based on the tax laws for that location—you don't need to configure this separately. Avalara knows which jurisdictions tax shipping and which don't.

Can I use Avalara for some orders and manual tax rates for others?

No. When Avalara AvaTax is enabled at Settings > Tax Rates, it applies to all orders store-wide. You cannot selectively use Avalara for some orders and manual rates for others. This is by design to ensure consistent tax calculation and accurate reporting in your Avalara account.

Do I need to update anything when tax rates change?

No. One of the primary benefits of Avalara AvaTax is that tax rate updates are automatic. When jurisdictions change their tax rates, Avalara updates its database automatically—you don't need to manually update anything in Pulse Commerce or Avalara. This ensures you're always charging current, accurate tax rates.

How do returns and refunds work with Avalara?

When you process a return or refund in Pulse Commerce, the associated tax refund transaction should also be recorded in Avalara. Check with Pulse Commerce support on the specific return/refund workflow for your integration version to ensure Avalara transactions are updated appropriately when refunds are issued..

Can I see a breakdown of which tax jurisdictions are charged?

Yes. Log in to your Avalara account and navigate to Transactions. Click on any transaction to see a detailed breakdown showing state tax, county tax, city tax, and any special district taxes that were calculated. This transparency helps you understand exactly how tax was determined for each order.

Why do my Avalara orders show as "voided" or have incorrect dates?

Avalara transactions may show as "voided" or have date discrepancies due to the following reasons:

Orders showing as "Voided" in Avalara:

• Order was edited in Pulse Commerce after the initial transaction was sent to Avalara
• Shipping address was changed after the order was placed, causing Avalara to void the original calculation
• Payment status changed from Paid to another status, triggering a void

Date mismatches between Pulse and Avalara:

• Orders placed near midnight may have different dates due to timezone differences
• Order date in Pulse reflects when the customer placed the order
• Transaction date in Avalara reflects when the API call was processed

To troubleshoot:

1. Log in to your Avalara account at https://admin.avalara.com
2. Navigate to Transactions and locate the order
3. Click on the transaction to view the detailed history and see why it was voided
4. If the order is "Paid & Shipped" in Pulse but voided in Avalara, contact Pulse Commerce support

Important: Voided transactions in Avalara are not included in your tax liability calculations. If orders should be committed, they need to be corrected to ensure accurate tax reporting.