Taxes FAQs

Get answers to common questions about Avalara costs, VAT validation, custom tax behavior, and how to locate tax history. This also explains why certain tax codes calculate differently based on regional rules and formatting requirements.

Does usage of Avalara cost extra?

No. Advanced Billing includes the use of the Avalara AvaTax Managed tax service with all plans.

Can I use different tax rates per product?

With Custom Taxes, you cannot configure individual tax treatment per product.

With Avalara AvaTax, you can. Each Product and Component has its own AvaTax Tax Code field, which you set on the Product's edit page. Assigning different tax codes to different Products lets Avalara apply different tax treatment to each one.

Why is my customer being charged tax even though their VAT number is valid?

If a Subscriber's VAT number includes dashes, remove them. A VAT number with dashes does not validate as tax-exempt.

Example: 112233445566 allows your customer to be tax-exempt. 11-2233-445566 does not.

A leading country code (for example, the SE in SE112233445566) does not need to be removed. Maxio strips it automatically before validating the number.

How do I locate my tax history?

Go to the Transactions tab and choose the dates for which you want to see data. Once the list is filtered, select Export Current View to produce a comma-separated file.

There is a short wait while the file is created, then you can download it and open it in your spreadsheet program. The column labeled kind (column M) indicates whether the transaction type is tax. Sort or filter the document by tax in that column to get totals or individualized history.

How do I mark a subscription/customer as tax exempt?

Go to the Customers tab and edit the appropriate customer's tax exempt property. The subscriptions attached to that customer are then also considered tax exempt and do not include tax charges during billing.

Some of my tax codes calculate improperly, why is that?

All tax codes and state tax that come from Avalara use Avalara's own calculation to determine the correct tax. Results sometimes differ based on rules specific to that tax code and state. Read the specific rules for the tax code and state you're using.

Example: Texas tax only charges tax on 80% of an invoice's value. So if there is a $100 charge, an 8% tax rate comes out to $6.40, not $8. That's because it's 8% of $80, which is 80% of the $100 invoice value.