Calculating Tax for an AP Voucher Credit Using Avalara AvaTax

If tax calculation using Avalara AvaTax is enabled in your org, you can calculate tax for an AP voucher credit. This is useful if you committed tax for the original AP voucher and you want to record credit in Avalara AvaTax, instead of canceling tax for the AP voucher.

Note:

When you void or credit an AP voucher, the tax values are not copied from the AP voucher lines to the AP voucher line credits.

Tax is calculated for each AP voucher line credit that has a quantity greater than zero and is not of type "Tax". If an Avalara tax code is specified for the related AP voucher line, Avalara AvaTax uses this code to calculate tax with greater precision, depending on the product being shipped. If an Avalara tax code is not provided for a line, Avalara AvaTax only uses the origin and destination addresses to calculate tax.

If you provide an exemption reason for an AP voucher line credit in the Use Code field, the line is recorded in Avalara AvaTax, but tax is not calculated for it.

When calculating tax, the origin address is set to the mailing address of the supplier site of the related purchase order. The destination address is determined from the related purchase order as follows:

  • If the Drop Ship field is selected for the purchase order, the drop ship address of the purchase order is used.
  • If the Override Ship to Address is populated on the purchase order, the customer address record is used.
  • If the Procured for field is populated on the purchase order, the shipping address of the customer account is used.
  • If the Ship to Warehouse field is populated on the purchase order, the address of the warehouse is used.

For a full description of the values sent from an AP voucher credit to Avalara, see AP Voucher Credit to Avalara AvaTax Mappings.

After tax is calculated, the relevant tax rate, value, and name fields are automatically populated on each line. This enables you to view a breakdown by jurisdiction, for up to three jurisdictions. The Tax and Tax Rate fields contain the total values for the line.

In addition, a new line of type "Tax" is created. The Amount field of this line contains the total tax for all the lines on the AP voucher credit. Each time you recalculate tax for an AP voucher credit, the tax line is replaced by a new one.

The Total Tax field on the AP voucher credit also enables you to easily view the total amount of tax for all lines. The External Tax Status is set to "Calculated". The External Tax Transaction ID and External Tax Status Last Updated fields are also updated.

Calculating Tax for a Single AP Voucher Credit

You can only calculate tax for an AP voucher credit once tax is committed for the original AP voucher.

Warning:

This action deletes any existing lines of type "Tax" and creates a new tax line. This cannot be undone.

To calculate tax for a single AP voucher credit using Avalara AvaTax:

  1. Open the AP voucher credit that you want to calculate tax for.
  2. Click Calculate Tax.
  3. Click Calculate Tax to confirm the action.