Configure taxation settings

After you've connected your Avalara account with Shopify, you can set up Avalara AvaTax rates in your Shopify admin. This lets you charge taxes in your store using Avalara’s services instead of Shopify’s built-in tax engine.

Did you know?

If you want to learn more about tax compliance, then Avalara's eLearning courses on Making Sense of Sales Tax and Sales Tax Basics are great places to start.

Default tax codes

Tax codes are unique labels that you can apply to the products and variants in your store. Tax codes identify the category that the product belongs to and determines the tax rules that apply to it based on the location in which it is sold.

Your products will be tagged with a default tax code (physical good tax code P000000), but you can change this if you're selling specific products or services that might need a to use a different code.

Initial set up

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:

Add a tax code to a specific product

If the default tax codes don't apply to one of your products or variants, then you can add a different tax code.

Note

You will need to edit the tax codes for your products and variants based on the AvaTax System.

To add a tax code to a product or variant:

  1. From your Shopify admin, click Products (or press G P P):

    Products

  2. Click one of your products or variants.

  3. In the Variants section, click Edit:

    Click edit
  4. In the Pricing section, click the Tax code drop-down menu to select the appropriate tax code:

    Tax code menu

    Note

    If you leave the product code blank, Avalara will assign a standard (physical good tax code) of P000000 to your product or variant.

  5. Click Save.

You can use the bulk editing option to edit multiple products or variants at the same time.

Apply tax codes for multiple products and variants

You can apply tax codes to multiple products and variants at once using bulk editing on the Products page of your Shopify admin.

To apply tax codes to multiple products and variants:

  1. From your Shopify admin, click Products (or press G P P):

    Products

  2. Select each of the products that you want to change. If you just want to edit variants of one product, select only that product.

  3. Click Edit products:

    Click edit products
  4. On the Bulk editing page, click Add more fields drop-down menu:

    Click add more fields
  5. Click the Tax Code tag.

  6. Click the field in the Tax code column and type the applicable tax code.

    Note

    You will need to edit the tax codes for your products and variants based on the AvaTax System.

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