Avalara Taxes for Shopify Plus Merchants

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Introducing the Death of Confusing Taxes

One of the biggest headaches for business owners is dealing with taxes. Especially for ecommerce store owners who ship globally, managing a complex set of taxes and doing it right often takes time and resources away from growing your business. 

Shopify Plus has got your back. They’ve integrated with one of the most powerful tax softwares around, called Avalara AvaTax.

What Does Avalara Do?

Avalara’s biggest win is that it automatically provides real-time tax codes from more than 12,000 taxing jurisdictions – so you don’t have to spend any more time trying to figure out which county you’re shipping to taxes what. Their database of tax rates are refreshed every five minutes, making it the most reliably accurate software out there.

If what you sell gets special tax rules that don’t fit in with the generic, you can customise and adjust. Once you set up your product codes, AvaTax keeps them updated.

And of course, it wouldn’t be a good tax software without reports that are easy to read and ready to use. You’ll get tax reports for sales and finance that are ready to go. They also offer full audit support.

Shopify Plus users can now integrate with Avalara, which does require a separate Avalara service payment.

Make It Happen: Setting up and using Avalara

Open an Avalara account and connect it with Shopify Plus

You can open an Avalara account directly from your Shopify Admin, or you can connect one that already exists.

  1. Log in → Settings → Taxes

  2. Hit “Get Started” in the Tax Services section

  3. Create an Avalara Account, including a password. If you already have an Avalara account, you can click the button just below “Create Account” and enter your credentials. You’re ready to start.

Set up your tax codes

If you’re selling things other than “general physical goods” you might have to make some tax code adjustments that use a rate other than the default. Using Avalara, you can look up all of your items and make sure they’re set to the correct codes.

Get sales and tax reports

Log in to your taxes section of your admin.

If you want a summary of the sales taxes that were applied to your sales, the Taxes finance report is a good place to start.

For many businesses, the report that can help you most with your sales tax reporting is the Sales finance report. You can export this report as a CSV file that includes the order amounts, taxes, and the POS, billing, and shipping locations. To make the most of this report, make sure you choose the correct time period (such as the calendar year), and select Full report when you export it. This report helps you get the information that you or your accountant needs to work on your sales tax returns.

To learn more about the Taxes finance report, see Taxes finance report. To learn more about the Sales finance report, see Sales finance report.

When would I NOT use Avalara?

At this point, Avalara does support VAT but not VAT exemptions. You can still use to calculate your rates. Because Avalara can’t yet collect VAT IDs, those that need to report exemptions often might choose a different tax service.

It also doesn’t work for Shopify POS, so if you have a physical storefront this could be a hiccup. 

Resources and Answers

Here are a few more places to learn the nitty-gritty.

Help me figure it out!

We know that wrapping your head around business taxes and reporting can be difficult. Elkfox is a Shopify Expert, helping those with Shopify Plus build excellent ecommerce stores. Talk to us today about using Shopify Plus with Avalara.