Set up your Avalara tax codes
After you connect your Avalara AvaTax account to Shopify, you can set up the Avalara tax codes for your products. Setting up tax codes enables you to charge taxes in your store using Avalara’s services, instead of Shopify’s built-in tax engine.
Default tax codes
Avalara AvaTax tax codes are unique labels that you apply to the products and variants in your store. Tax codes identify the category that a product belongs to and determines the tax rules that apply to a product, based on the location in which it's sold.
When you start using Avalara AvaTax, your products are initially assigned the code P000000, the default tax code. If you're selling products or services that need to use a different code, then you can change the tax code for those products.
Set up your tax rates
Before you start configuring your Avalara AvaTax tax codes, make sure that you complete the following tasks in your Shopify admin and in your Avalara account:
In your Shopify admin, set up your tax rates. If Avalara's service is temporarily unavailable, then Shopify's tax settings will provide the tax rates for your products and shipping.
In your Avalara AvaTax account, set up your nexus jurisdictions to inform Avalara AvaTax when and where your company will calculate and report tax. If you make sales in jurisdictions that you haven't set up in Avalara AvaTax, then the resulting tax calculation will return a value of zero.
If you use Shopify POS to sell in different locations, then you need to do the following tasks in Avalara AvaTax:
- Add a company location for your Shopify POS.
- Add a nexus jurisdiction for your Shopify POS.
Verify that all the necessary tax information that you've provided is the same in both Shopify and Avalara AvaTax.
Set the AvaTax code for a product
AvaTax adds a default tax code to each product in your Shopify store. The default tax code for physical goods is P000000.
For each product or variant in your Shopify admin, make sure that the Tax code is set to the Avalara tax code for that product.
Look up the tax codes for your product in the Avalara AvaTax System.
In your Shopify admin, go to Products and click the product.
In the Pricing section, click the Tax code field and enter the appropriate tax code.
- Click Save.
Apply tax codes for multiple products and variants
Apply tax codes to multiple products and variants at the same time by using the Bulk Editor for products in your Shopify admin.
Tax codes can also be applied with the Shopify Admin API by setting the
tax_code property with the Product or Product Variant endpoints.