For the complete documentation index, see llms.txt. This page is also available as Markdown.

Overview


Introduction

Sales Tax Automation services such as Avalara AvaTax enable businesses to automate tax calculation and ensure compliance with regional tax regulations.

The integration of Avalara with XoroERP allows the system to:

  • Automatically calculate tax in real time

  • Eliminate manual tax rate configuration

  • Handle complex tax rules across jurisdictions

  • Support both Sales and Purchase transactions


How the Integration Works

When Avalara is enabled:

  1. A transaction is created in XoroERP

  2. Transaction details are sent to Avalara

  3. Avalara evaluates:

    • Address (Ship From / Ship To)

    • Item taxability

    • Customer tax status

    • Nexus (tax obligation region)

  4. Tax is calculated and returned

  5. XoroERP applies the tax to the transaction


Key Concepts


Tax Calculation vs Record Document

Setting
Description

Calculate Tax

Only calculates tax, does not store transaction

Record Document

Stores transaction in Avalara for compliance


Entity Use Code (Customer Tax Status)

  • Defined in Customer β†’ Sales Tax Tab

  • Determines if a customer is:

    • Taxable

    • Tax Exempt


Tax Category Code (Item Tax Code)

  • Defined in Item β†’ Tax Settings

  • Determines how the item is taxed

Last updated

Was this helpful?