Set up your Avalara tax codes
After you've connected your Avalara account with Shopify, you can set up the Avalara tax codes for your products. This lets you charge taxes in your store using Avalara’s services instead of Shopify’s built-in tax engine.
Default tax codes
Avalara tax codes are unique labels that you can apply to the products and variants in your store. Tax codes identify the category that a product belongs to and determine the tax rules that apply to a product based on the location in which it's sold.
When you use 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 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 a different location, then you need to do the following tasks in Avalara:
Verify that all the necessary tax information that you've provided is the same in both Shopify and Avalara.
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 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
You can apply tax codes to multiple products and variants at once by using the Product or Product variant resources in the Shopify Admin API, or by using the Bulk Editor for Products in your Shopify admin.
In the following example, the tax code PC040101 is added to the Acme Apron variant:
In the following example, the tax code PC040413 is added to the product variant Youth: