Configure Taxes

Advanced Billing offers three ways to charge tax, and they differ in how precisely they calculate and how much setup they need. Use this guide to pick the method that fits how your company handles tax, configure the origin and destination addresses every method depends on, then complete the setup specific to the method you chose.

At a glance

Feature

Taxes:

• Custom Taxes
• Managed Sales Tax
• Bring-your-own Avalara

You Need

Your company's valid business address used for taxing purposes

The custom tax rules your company needs, for Custom Taxes

Your Avalara Account ID and License Key, for the Avalara Integration

Code

None

Difficulty

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Choose a tax method

Pick one method before configuring anything. Switching later is possible, but enabling Managed Sales Tax disables any custom taxes you already set up.

Tax methods and when to use each

1. Configure your tax addresses

Every method needs to know where you are and where your customer is, because tax depends on both. Set both addresses once, and they apply whichever method you go on to configure.

Add the tax origin address

The tax origin address is where your business is located.

Set the tax destination address

The tax destination address is the customer address Advanced Billing taxes against. Choose which of the customer's addresses decides it.

2. Configure your chosen method

With both addresses in place, complete the setup for the one method you picked. Follow only the section that matches it.

Set up custom taxes

Custom taxes are rules you write yourself, each pairing a country and state with a rate.

On the Taxes settings page, click + Create New Tax.

Then complete the form.

Set up managed sales tax

Managed Sales Tax hands calculation to Avalara through Advanced Billing's own integration, so you don't supply rates yourself. Instead you tell Advanced Billing which regions you're liable in.

WARNING: Enabling Managed Sales Tax disables any existing custom taxes. If you already configured custom taxes, check the tax included in price option on your price points afterward to reconfigure existing product and component taxes.

On the Taxes page, click Enable Advanced Billing Taxes.

Confirm your tax origin address when prompted. This is the same address described in step 1, and Managed Sales Tax requires a full, valid one.

Finally, set your taxable regions.

Important: Customers outside your taxable regions are not taxed at all. Taxable regions are the jurisdictions you declare yourself liable in, so anything you leave unset produces untaxed invoices rather than an error.

Set up the Avalara integration

This method connects your own Avalara account rather than using Advanced Billing's.

On the Taxes page, click Get Started in the Link My Avalara Account panel.

Then supply your Avalara credentials.

Related information

To show a tax breakdown, such as an EU VAT or UK VAT breakdown, on the invoices these taxes appear on, see the Configure Invoices help article.