Customer exemption and product tax types in Avalara

Customers that are fully or partially tax exempt, or products with a special tax status must be configured within Brightpearl and the Avalara connector in order to be transmitted to Avalara properly.

Customers with exemption status

AvaTax uses entity/use codes to identify a customer's tax status. These codes indicate pre-populated customer taxability profiles present in the AvaTax system. 

As such, if you deal with customers who are fully or partially tax exempt then you must create a custom field in Brightpearl to store this data.

  1. Navigate to Settings > Custom fields > Customers
  2. Add a new "Freeform text" custom field for Avalara customer exemption status. (You can choose the field name, code and tab.)

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Then, populate this custom field against a customer record to identify the contact's tax exemption status, leaving it blank where there is no exemption. For example, enter 'E' for charitable organizations. A full list of AvaTax's entity/use codes can be found here.

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Products with a special tax status

If you sell products with a special tax status then you must create a custom field in Brightpearl to store this data.

  1. Navigate to Settings > Custom fields > Products.
  2. Add a new "Freeform text" custom field for Avalara product tax type. (You can choose the field name, code and tab.)

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Then, populate this custom field against a product record to identify the product's tax status, leaving it blank if it has no special status. A full list of AvaTax's tax codes can be found here.

Connector settings

Once the custom fields have been set up, you need to map them in the connector settings so the integration is aware of which data to send to Avalara during tax calculation and when reporting invoices.

  1. Navigate to the Avalara App's Connector Settings through the App Store
  2. Update the "Field to use for Avalara product tax type" value to your new custom field
  3. Update the "Field to use for Avalara customer exemption code" value to your new custom field
  4. Save the settings

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Next read about setting up tax rules for shipping and miscellaneous order rows.

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