Integrating AvaTax with WebShop
Purpose and scope
Avalara AvaTax is cloud-based software for calculating tax owed on products sold. It applies updated rates based on location, legislation, tax regulations, item taxability, and more. Our integration with AvaTax provides your customers with a seamless checkout process, with relevant sales tax applied to their carts.
This feature guide describes how the integration works and how to configure it. For more information on its impact on your customer’s checkout flow when it is configured, read Checkout (USA and Canada).
Assumptions
You are responsible for maintaining an active Avalara account.
Any costs associated with using your Avalara account are your responsibility.
Benefits
Key benefits are:
Compliance with tax legislation and regulations in the United States of America and Canada
When active, it provides a seamless and integrated sales tax calculation for customers as they place their orders in the United States of America and Canada.
Introducing terms and concepts used in this article
Term | Definition |
|---|---|
Application Platform Interface | (API), which is an interface that allows two different computer systems interact with each other. It consists of a number of rules (also known as endpoints) that request data from the other system and receive and process responses from that system. |
Customer | a client of the merchant. |
Merchant | a company who uses Experlogix Digital Commerce Platform. |
Sales tax | generic term used to cover the additional tax applied to products in a B2C context. It refers to VAT in the UK and EU, GST in Australia and New Zealand and federal and state tax applied to product sales in USA and Canada. |
Product tax code | a classification that the merchant assigns to each product to allow a tax calculation engine calculate the correct sales tax to apply to an order. |
Web service | service that allows two disparate systems communicate with each other via a standard messaging system. |
Fitting it all together
Avalara AvaTax is tax calculation software used to calculate tax owed on products sold.
Avalara must be installed via the App Store. This is a two-step process, where you create a link between WebShop and Avalara with relevant information and then activate the link. Once both these steps are complete, a web service is created that allows the transfer of relevant data between Avalara AvaTax and WebShop. The web service comprises several API calls (endpoints) that request and retrieve specific information as needed during your customer’s checkout process. When active, Avalara AvaTax acts as the tax calculations engine during checkout for transactions made in the United States of America (USA) and Canada.
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During checkout, WebShop makes API calls to send product information, which AvaTax uses to perform tax calculations. AvaTax returns the result of these tax calculations, which are then displayed on WebShop.
Tax is calculated based on the ShipTo (delivery) or ShipFrom (dispatch) address for the order. The Avalara app includes ShipFrom fields that you can configure during setup. Adding relevant information to the ShipFrom fields in your app configuration ensures that tax calculations are accurate, as different taxes are applied based on the location from which products are shipped. If the ShipFrom fields are not populated, the tax owed is based on the ShipTo (delivery) address.
When installing the Avalara app, verify that the ShipFrom fields match those in your ERP and in your Avalara account, as no automatic verification occurs upon activation.
The information sent to AvaTax depends on where specific data is stored, specifically whether you have product tax codes stored in Avalara or the Management Interface. The product tax code is an alphanumeric text string that identifies an item as being part of a set of items; for example, Lumber - solid wood product has a product tax code of PA3000400. You can store the product tax code in either Avalara or upload it to our platform, where it is displayed on the Tax Codes screen in the Management Interface. The product tax code screen is only visible and available to use once the web service between Avalara and WebShop has been established. The web service does not have to be active for the product tax code screen to be visible and available for your use.
During checkout, an API call sends product and product tax code data (if it exists) from WebShop to AvaTax. If [product] tax codes are only stored in Avalara, then only product data is sent from WebShop to AvaTax. AvaTax performs appropriate tax calculations and returns the applicable tax, which is displayed in WebShop as part of the checkout process.
When installed and active, Avalara is the source of truth for tax calculations.
Tasks
References
External site: AvaTax: Sales Tax Calculation Software - Avalara