commonsku & Avalara

commonsku has partnered with Avalara, the leader in tax automation software, to help make complex taxes simple. Avalara's dedicated tax experts and technologists can help with your tax challenges and provide a solution for your business needs.

Avalara helps small businesses (that's you!) navigate sales tax compliance by providing an automated solution to help with your tax needs. Rather than manage shifting tax rates, new legislation and tax rules, or track taxability across state lines, you can outsource your sales tax needs to Avalara and let them do the heavy lifting. AvaTax will help you register for and collect tax in the locations you need to be.

This help article explains how to set up Avalara in commonsku. If you don't have an Avalara account, you can use the links below to

• Learn more about what Avalara has to offer.
• Contact the customer success team to put you in touch with commonsku's dedicated reps.

On this page:

Key terms
Prep work
How to connect Avalara to commonsku
How to select your default settings
How to add product, edit, and delete product categories
How to assign an Avalara tax-exempt category to a client
How to use Avalara tax on an estimate or sales order
How to use Avalara tax on an invoice
How to use Avalara tax on your commonsku Shops
QuickBooks Online tax view
Avalara tax view
Best practices
How to fix error codes
Download your Avalara Launch Guide
FAQ

Key terms

Avalara tax code: Non-editable field that pulls the tax code directly from Avalara.

Avalara tax description: Non-editable field pulls the Avalara tax code description directly from Avalara.

Category name: An editable field that will appear to your team when selecting tax codes on projects. You can change the category name at any time; however, the best practice is to choose final category names during the initial setup to ensure consistency.

Committed (Avalara transaction status): The transaction is committed to AvaTax and included on reports and the next filed return. Concerning commonsku, this means that the invoice has been exported to accounting.

Preset categories: Commonly used industry-specific tax codes.

Uncommitted (Avalara transaction status): The transaction is added in AvaTax, but not committed. It isn't included on reports or returns filed by Managed Returns until it's committed. Concerning commonsku, this means that an order's tax has been calculated, but the invoice has not been exported to accounting.

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Prep work

Here are a few things to take care of before you connect your Avalara account to commonsku:

• To start, you need to create an account with Avalara.
• If you are using QuickBooks Online, create a new non-inventory product or service inside of QuickBooks Online and map your Avalara tax line to it.

• Update your Company Contact Information and assign your company's main billing address as the default address on your account

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How to connect Avalara to commonsku

To connect Avalara to commonsku:

1. Click your Profile icon (top right corner of commonsku) > Settings > Company Settings
2. Click the Integrations section
3. Click the Avalara tab in the pop-up window
4. Enter your Avalara account ID and License key, then click Connect to Avalara Production

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How to select your default settings

Your default settings include:

• Default Company - select your company from the drop-down menu (set up in Avalara).
• Default Category - this category will default on each project for your entire company and can be changed as needed. 
• Default Shipping Category - this category will default on each project for your entire company and can be changed as needed. 
• Disable document recording - when turned on, taxes will not be posted or committed to Avalara. Select this option if your Avalara commits are done by another system (ERP).
• Test mode - when turned on, commonsku will provide a drop-down for each project's tax code that allows you to test Avalara while your teammates are still using Zip2Tax or manual Tax Codes. When turned off, all projects will default to Avalara tax with no option to use Zip2Tax or manual Tax Codes.

Click the drop-down menu or checkbox beside the setting name to choose your default settings.

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How to add product categories

You can add product categories by:

• Manually adding a single category
• Importing a category list
• Adding preset categories

You can also edit and delete product categories as needed.

How to add a single category

1. Select + Add New Category
2. Enter a category name
3. Begin to type the Avalara tax code and select the relevant code from the pre-populated list
4. Click Save

How to import categories

Your import file must:

• Be a CSV file (XLSX files are not accepted)
• Use the header "category" in column A
• Use the header "avalara_tax_code" in column B

To import your categories:

1. Click + Import Categories
2. Select your CSV file by selecting the file and dragging and dropping or clicking within the blue "Drop here" lines to load from your computer
3. Click Import

How to add preset categories

1. Select + Add Preset Categories
2. Choose the applicable categories
3. Click Add Categories

To edit a product category:

1. Hover over the code you wish to edit
2. Click the Edit button
3. Update the category name or tax code
4. Click Save

To delete a product category:

1. Hover over the category you wish to delete and select the Delete button

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How to assign an Avalara tax-exempt category to a client

To assign a tax-exempt category to a client:

1. Open your Sales tab and select Clients
2. Locate the client you need to update > hover over their name > and click to open the slide-out menu
3. Click the Actions button and choose Edit Details
4. Scroll to the bottom and select the appropriate Entity Use Code from the drop-down menu
5. Click Save

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How to use Avalara tax on an estimate or sales order

You can calculate tax at the estimate, sales order, or invoice stage of a project. However, the tax is not committed to Avalara until you export the invoice into accounting (QuickBooks Online).

To set a default tax category for an estimate or sales order:

1. Click the "Default Tax" drop-down and choose Avalara
2. Select the order's billing and shipping address (a valid shipping address is required to calculate tax)
3. After ALL products and services are added and edited as needed, click the Calculate Tax button to calculate a combined tax rate based on the current order details (see best practices)

To change the tax applied to a single product:

1. Click to Edit the item
2. Select the "Avalara Item Code" drop-down menu and choose the relevant tax code to apply to all costs within the item

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How to use Avalara tax on an invoice

You can calculate tax at the estimate, sales order, or invoice stage of a project. However, the tax is not committed to Avalara until you export the invoice into accounting (QuickBooks Online).

How to apply tax to a single shipping address

1. Create the invoice as usual
2. Ensure the invoice details, including the billing and shipping addresses, products, and services, are correct
3. Click the Calculate Tax button to calculate a combined tax rate based on the current order details (see best practices)
4. Export the invoice as usual

How to apply tax to multiple shipping addresses

1. Create a separate invoice for each shipping address
2. Ensure the invoice details, including the billing and shipping addresses, products, and services, are correct
3. Click the Calculate Tax button to calculate a combined tax rate based on the current order details (see best practices)
4. Export the invoice as usual

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How to use Avalara tax on your commonsku Shops

If you have existing commonsku Shops, Avalara will prompt you to clean up your Shop's ship-to addresses during the initial setup. Moving forward, you will need to select an estimated tax within your Pop-Up and Company Shops before you can accept payment.

Pop-Up Shops will calculate tax based on the ship-to address listed in the shop's settings.

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QuickBooks Online tax view

Here are a few things to note:

• The Avalara tax will show as being exempt in QuickBooks Online.
• The Avalara tax will be classified under the QuickBooks Online product or service item mapped during your initial setup.
• The Avalara tax will be bulked together per tax rate.

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Avalara tax view

Here are a few things to note:

• Your tax commitment will be captured under your transaction in Avalara.
• The Doc Code is the project number_invoice number.

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Best practices

Here are a few best practices to help keep in mind while using Avalara taxes in commonsku:

• Tax categories - You can change the category names at any time. Still, it is best to choose final category names during your initial setup to help ensure consistency and avoid confusion.
• Responsibilities - Your team's admin is responsible for setting up the Avalara taxes in commonsku. Sales reps are responsible for choosing the correct tax categories on all product and service lines.
• Calculating tax - Avalara charges per tax calculation. With that in mind, sales reps should ensure their order details are correct before clicking the Calculate Tax button. 
• Exporting to QuickBooks Online - Once an invoice is exported, further changes must be made manually in commonsku, QuickBooks Online, and Avalara. You cannot re-export the invoice.
• Canceling an exported invoice - Avalara's transaction status updates to Committed as soon as an invoice is exported. If you need to cancel the invoice, you'll have to fix it manually inside Avalara. You cannot "un-export" an invoice from Avalara.
• Shops - Avalara changes how tax is calculated inside of commonsku Shops. All of your shops will require a verified shipping address and an estimated tax rate before you can accept credit card payment. Pop-Up Shops will automatically calculate tax based on the ship-to address in the shop's settings; you cannot override the tax rate.

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How to fix error codes

• Error: The address value was incomplete
• Error: Unable to validate the address
• Error: An exact street name match could not be found
• Error: Address not geocoded
• Error: Tax calculation cannot be determined. Zip is not valid for the state
• Error: Invalid ZIP/Postal Code

Error: The address value was incomplete

The address is missing the required details.

To fix the error:

1. Open the client's page and click to edit the address
2. Update the address to have a valid Postal/Zip Code, Address line 1, City, and Region, or Address line 1 and Postal/Zipcode
3. Click Save

Error: Unable to validate the address

The address details may be incorrect.

To fix the error:

1. Open the client's page and click to edit the address
2. Confirm and update the address details as needed
3. Click Save

Error: An exact street name match could not be found

The address details may be incorrect.

To fix the error:

1. Open the client's page and click to edit the address
2. Confirm and update the address details as needed
3. Click Save

Error: Address not geocoded

The address details may be incorrect.

To fix the error:

1. Open the client's page and click to edit the address
2. Confirm and update the address details as needed
3. Click Save

Error: Tax calculation cannot be determined. Zip is not valid for the state

The provided address contains a postal code and state combination that is not valid. The address details may be incorrect.

To fix the error:

1. Open the client's page and click to edit the address
2. Confirm and update the address details as needed
3. Click Save

Error: Invalid ZIP/Postal Code

The ZIP/Postal Code does not exist and could not be determined by the city/municipality and state/province. The address details may be incorrect.

To fix the error:

1. Open the client's page and click to edit the address
2. Confirm and update the address details as needed
3. Click Save

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Download your Avalara Launch Guide

Please click here to download your Avalara Launch Guide.

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FAQ

• Does Avalara work for both US and Canada?
• If we already use Avalara, can we connect our existing account to commonsku?
• Is there an additional fee to use the Avalara integration? How much does Avalara cost?
• Is there a discounted rate for Avalara by signing up through commonsku?
• Does Avalara work in shops? 
• Is "nexus" a threshold where taxation begins? If we hit $100K in a state that has that threshold do then we begin collecting sales tax?
• Does my tax nexus reset each year?
• Does the integration keep track of our sales volume to help us determine whether we meet the thresholds for each state?
• Does Avalara consider $0 invoices as transactions when it comes to the threshold with nexus?
• Does Avalara handle the sales tax registration requirements in each state requiring sales tax collection?
• Does the commit happen to the fiscal period based on the invoice date? Or based on the export date?
• Does Avalara handle sales tax audits? Is there an additional charge for this? If the audit results in a penalty/fee, will Avalara pay the fee?
• Can we choose to still do our own tax reporting and only use Avalara for calculations?
• What if you don't use Avalara to submit sale tax?
• Does the tax automatically recalculate whenever I make changes to the order?
• Now that I'm using Avalara, can I add multiple tax rates to a single invoice and export it to QuickBooks Online?
• Will our invoices be double-calculated if we already use Avalara through QBO?  
• Does Avalara integrate with Netsuite?
• Is Zip2Tax still available now that Avalara is live?

Does Avalara work for both US and Canada?

Yes! It works for both Canadian and US sales. 

If we already use Avalara, can we connect our existing account to commonsku?

Yes! You will need to reach out to the Avalara team for the information to get connected, but you can upload your current tax category list and use your current settings. 

Is there an additional fee to use the Avalara integration? How much does Avalara cost?

commonsku does not charge a fee for the integration, however, you would need to have an account with Avalara to connect. Charges for Avalara can vary greatly by customer. AvaTax pricing is based on the number of completed invoices annually in your Nexus States only. Please reach out to the team at Avalara for more information about pricing.

Is there a discounted rate for Avalara by signing up through commonsku?

There is no formal discount rate available for commonsku users, but you can contact the team at Avalara for more information about pricing options.

Does Avalara work in shops?

Yes, it does! However, at the moment you can only use one tax rate per address for company shops, and one rate per pop-up shop. 

Is "nexus" a threshold where taxation begins? If we hit $100K in a state that has that threshold do then we begin collecting sales tax?

Yes! Your nexus contains the states in which you need to collect sales tax. Every state is different but it is usually based on volume or number of transactions. Once you hit that number, you are required to start charging sales tax. 

Does my tax nexus reset each year?

The short answer is that it depends on your state. Check out this Avalara article for more details.

Does the integration keep track of our sales volume to help us determine whether we meet the thresholds for each state?

Yes! Avalara will track your sales in each state and notify you when you have hit nexus within a state. You can then update your settings to include that state in your nexus.

Does Avalara consider $0 invoices as transactions when it comes to the threshold with nexus?

The thresholds are determined by the individual states. Some states do count exempt sales.

Does Avalara handle the sales tax registration requirements in each state requiring sales tax collection?

Yes! Avalara offers State Registration services for $349.00 per State.

Does the commit happen to the fiscal period based on the invoice date? Or based on the export date?

This varies based on the workflow, but usually a commit happens when an invoice is completed.

Does Avalara handle sales tax audits? Is there an additional charge for this? If the audit results in a penalty/fee, will Avalara pay the fee?

Avalara will answer your sales tax notices but doesn't handle a sales tax audit. Sales tax audit defense is a service offered with a subscription to the Avalara Tax Research Tool.

Can we choose to still do our own tax reporting and only use Avalara for calculations?
What if you don't use Avalara to submit sale tax?

Yes! Avalara can calculate your sales tax and you can continue to remit the sales tax returns. 

What if you don't use Avalara to submit sale tax?

You can use AvaTax only - this will help calculate the sales tax and then remit on your own without Avalara's Managed Returns Service. 

Does the tax automatically recalculate whenever I make changes to the order?

No. Avalara does not automatically recalculate tax if you make changes to an order or your Company Contact Info. Click the Calculate Tax button to recalculate based on the new details.

Now that I'm using Avalara, can I add multiple tax rates to a single invoice and export it to QuickBooks Online?

Not quite yet. Our initial Avalara launch cannot accommodate multiple tax rates per invoice, but it is something we're working on for a future update! In the meantime, you can either add the taxes as a service line or create multiple invoices.

Will our invoices be double-calculated if we already use Avalara through QBO? 

Yes! You would reach out to Avalara to get connected with commonsku and use the "Disable Documentation" feature to avoid double committing your charges.

Does Avalara integrate with Netsuite?

Yes! Avalara can integrate with Netsuite or with us and push the tax amount to Netsuite through webhooks or export.

Is Zip2Tax still available now that Avalara is live?

It is. All the other tax options are still usable inside the platform. 

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