Avalara's AvaTax Connect

Author: Doug Sleeter  Created: Mon Feb 13 13:48:50 2006

The operational hassle of sales tax compliance is becoming more and more daunting - particularly for small businesses with multiple locations and e-merchants. One of my "Awesome QuickBooks Add-ons for 2006" was Avalara's "AvaTax ConnectT" which automates sales tax compliance tasks for QuickBooks Pro, Premier and Enterprise users. Here is an in-depth look at how AvaTax Connect works to streamline your sales tax compliance function.

What do I mean by "the sales tax compliance function"?
In short, AvaTax automates the four "Rs" of sales tax: Rates, Reports, Returns, and Remittance.

Sales tax compliance begins with address verification: a correct and standardized address is needed in order to research which of the eight-thousand-plus North American taxing jurisdictions apply to a given location. Then, factoring in your company's unique nexus (locations), product taxability, exemptions and applicable taxation rules, the actual tax calculation is performed against the sale amount and entered onto the QuickBooks invoice. With AvaTax, all of this takes place with every transaction, and your order entry person doesn't have to adjust to any change in their workflow - it all happens behind the scenes via an Internet connection between your computer and the AvaTax servers.

In addition to calculating the correct sales tax for each sale, ensuring compliance also requires detailed reporting, generating and filing returns, and remittance. AvaTax automates these processes as well. As the user of AvaTax, you use the AvaTax DashboardT management console to manage "tax profiles" such as nexus and taxability. After you configure your settings, you never have to research or maintain a rate again. Entering sales transactions is faster; accurate address data is ensured; and your tax remittance amounts are accurate.

Many times I've heard how sales tax plagues small businesses, and in truth, sales tax automation has pretty much been reserved for larger enterprises that can afford the cost and dedicated internal resource requirements that come with installing and maintaining enterprise software. The reason Avalara is able to offer this in a package that's affordable for small businesses, is that their applications are delivered over the Web, with a centralized, professionally managed sales tax engine.

How does it work with QuickBooks?
Avalara establishes a bridge between AvaTax Connect and QuickBooks that ties the tax calculation and reporting functions directly to the invoice creation within QuickBooks, eliminating the need for setup and continual maintenance of tax rates. Sales tax can be particularly complex when rate structures include multiple tax components such as state, county and/or city taxes combined with different taxability rules for each product you sell.

AvaTax Connect acts as an additional file option within QuickBooks while working in the background. It performs real-time address verification against its CASS-certified database of U.S. Postal Service addresses to ensure proper identification of tax jurisdiction. Then, AvaTax calculates the sales tax and maintains detailed records of your tax collections to be used for tax filing and reporting. All data is maintained on secure servers to ensure privacy for customers.

To determine the correct tax, AvaTax considers all taxing jurisdictions that apply to the verified address, as well as any pre-configured sourcing rules, taxability and nexus settings unique to the business. In calculating the tax amount, AvaTax Connect considers each of the line items, the product taxability, customer exceptions, and will also calculate local taxes, maximum taxes, minimum taxes, tax-holidays and split taxes.

AvaTax Connect databases are updated continually and are invisible to the end user, ensuring that the user is utilizing the most current information available and eliminating human error.

Pricing
The AvaTax Connect integrated edition for Pro, Premier Editions, and Enterprise QuickBooks users can be ordered for as low as $9.95 per month with per-transaction and activation fee, or with transactions-included packages starting at $29.95 monthly plus activation.

For more information or to view an animated demo, visit Avalara's website, or call 1-877-780-4848.