Avalara AvaTax is a sales tax software that automates tax calculations and the tax filing process. Avalara provides real-time tax rates from more than 12,000 taxing jurisdictions (Shopify’s taxes are based on ZIP codes).
Status and eligibility
This integration is now available for all Shopify plus merchants that are using the ReCharge Checkout.
- Get accurate and up-to-date tax codes from more than 12,000 jurisdictions.
- Fine-tune a set of tax rules.
- Create accurate reports of your taxes.
- Use tax overrides for each product you sell in Shopify.
If you are a Shopify Plus merchant that is using the ReCharge Checkout, reach out to the ReCharge Support team to enable the integration on your ReCharge store.
How it works
Avalara Avatax is embedded in Shopify Plus and can be enabled by any Shopify Plus merchant. Enabling this integration involves creating tax codes in Avalara and then associating them with product variants in Shopify. When used with ReCharge's Avatax integration, both one time purchases through Shopify's checkout and subscription purchases made via ReCharge checkout, UI, or API will reference these tax codes in Shopify via the variant API.
First charge at checkout/UI/API
ReCharge references the Avalara tax code from Shopify (which is informed by Avalara Avatax) for a specific purchase and then applies the correlated rate based on this specific Avalara tax code.
ReCharge references the Avalara tax code from the queued charge JSON for a given subscription. These tax codes are updated if the charge is regenerated, and again each time a new charge is generated. Keep in mind, you must regenerate existing queued charges if you want them to reference any tax codes that were updated after they were generated.
Merchants who use the ReCharge/Avalara integration can leverage their tax reporting features with full confidence that subscription purchase information will be accurate. This is because ReCharge creates orders in Shopify with tax information and Shopify creates invoices in Avalara based on these orders.
Connecting stores to one Avalara account
This is possible, you would just need to create two companies within the Avalara dashboard and have each store connected with each store, so it will be one account ID but two different companies within the dashboard.
Tax exemptions set at the product level in Shopify by default do not currently work as expected. To set up a tax-exempt product you can use the custom tax code ON030000 as mentioned in this Avalara article.