Avalara AvaTax

LemonStand is integrated with Avalara AvaTax, which makes calculating tax rates easy and automatic. Avalara provides real-time tax calculation using tax content from more than 12,000 US taxing jurisdictions and over 200 countries, insuring your transaction tax is calculated based on the most current tax rules.

Setting Up an Avalara AvaTax Account

To get started, you must have an Avalara AvaTax account. You can sign up for that here

Once you have an account ready, read through the documentation for Setting up Your Avalara AvaTax Account. The most important pieces include: 

  1. Configure your company profile.
  2. Select Nexus Jurisdictions (where the company needs to calculate sales and use tax due to "substantial physical presence" in a taxing jurisdiction).
  3. Create tax codes and specify distinctive tax rules as needed for the store. For example, if certain products at the store need to be listed as non-taxable, or if we need to have specific rates for different products, this needs to be configured in the Avalara account.

Configure Avalara Settings in LemonStand

Once you have an account, you will need 3 pieces of information:

  • Account ID
  • License Key
  • Company Code

Here's how to get this information:

Log in to the Admin Console at admin.avalara.com or sandbox.admin.avalara.com for sandbox accounts. Click on "Settings" to see your Account ID and Company Code, shown below:

You can change your Company Code by clicking "Edit Company". Next find your License Key by scrolling down to the bottom of the same "Settings" page as above:

With these 3 pieces of information, fill out the integration settings page in your LemonStand store's backend. Navigate in your LemonStand admin to Integrations > Applications, hover over the Avalara logo and click Configure & Activate. You should see this page:

Click the blue "Save" button. After saving, test your credentials by clicking the grey "Test Connection" button at the bottom.

Document Recording Toggle

The document recording toggle is a way to capture transactions in Avalara AvaTax for tax reporting. Enabling the toggle means your store will send order data through to Avalara as they complete.

Note: Once this toggle is enabled, only new orders will be captured and sent to Avalara. Past orders will not be backfilled into Avalara's transaction records.

Where can I find these Transactions in Avalara AvaTax?

Login to AvaTax and navigate to "Transactions". You will see new orders come through in this list:

Setup Product Taxes

Start by reading about how Tax Codes work in Avalara.

We'll be creating a new tax class for every tax code that's applicable to the products you sell. This means you should find each Avalara tax code that you want to use first. Tax codes can be searched for and found here. Once you have a list of tax codes ready, follow these steps for each tax code:

  1. In your LemonStand admin, navigate to Business Settings > Taxes, and click the Add Tax Class (+) button.
  2. Select Avalara from the list, and click Continue.
  3. Enter in a name for this tax class. If you'd like it to be the default for all products, select that checkbox.
  4. Enter in the product tax code that is applicable to the products that you'll use this tax code for.
  5. You can use the Test Tax Calculation feature to check if rates are being calculated properly. Just complete the fields and click the Get tax rates button.

Setup Shipping Taxes

  1. Find an applicable Avalara Tax Code for your shipping costs.
    1. Use the Tax Code Search tool, look under "Freight" tax codes
  2. Create a new tax class in LemonStand.
    1. Navigate to Business Settings > Taxes, and click the Add Tax Class (+) button.
  3. Select Avalara from the list, and click Continue.
  4. Enter in a name for this tax class.
  5. Enter in the tax code that you found in step 1, and save this new tax class.
  6. Navigate to your LemonStand Shipping Method. Each shipping method can be assigned a tax class, so assign your new tax class to the shipping method you are using:

7. Click "Save" in your shipping method.

Configure Shipping Origin

Note that the Avalara integration requires your store has its shipping configuration complete. See the Shipping Configuration Docs and follow along to complete this requirement.

What if I want to use a Manual Tax Class for certain products?

That's OK! If a product using a manually created Tax Class is purchased, the transaction will still be logged in Avalara Avatax. The item will not use Avalara to calculate it's tax, and the amount will be recorded in Avalara. You'll also see a warning for these transactions:

Customer Tax Exemptions for Entity/Usage

Some customers will require an Entity/Use Code to be attached to their transaction. For instance, a purchase made by the US government would be designated for government use, and it would be exempt or non-taxable for that specific use.

To apply an entity/use code to a specific customer in your store, navigate to that customer in your backend. If the integration is set up correctly in your store, you should see a new field for this entity/use code:

You can read more about this in Avalara's documentation covering Entity/Use Codes.

When a customer with an Entity/Use Code purchases an order from your store, the Avalara transaction will capture this and log the information in your account records:

Data in Avalara

There are a number of fields in each Avalara transaction that map to LemonStand store data, visible in the screenshot view above.

  • Document Code: Refers to the Order's Number in LemonStand.
  • Customer: Refers to the Customer's ID in LemonStand.
  • Line Item: Refers to Product SKU
  • Line Item Description: Refers to Product Name, plus any potential options or custom fields