Sales Tax Calculation Made Easy

Avatax module automates the complex task of sales tax calculation with ease

Overview

Odoo provides integration with AvaTax, a tax solution software by Avalara which includes sales tax calculation for all US states and territories and all Canadian provinces and territories (including GST, PST, and HST). This module is capable of automatically detecting origin (Output Warehouse) and destination (Client Address), then calculating and reporting taxes to the user's Avalara account as well as a recording the correct sales taxes for the validated addresses within Odoo ERP.

This module utilizes core certified modules from Odoo as dependencies. The following dependencies will be installed: base, sale, account, account_accountant, and stock modules. The module also has sandbox data for configuration with demo deployments as needed. Once configured, the module operates in the background and performs calculations and reporting seamlessly to the AvaTax server. Account information to access the Avatax dashboard can be obtained through the Avalara website here:

https://www.avalara.com/products/avatax/

This guide includes instructions for the following elements:

Activating your organization’s AvaTax account and downloading the product
Entering the AvaTax credentials into your Odoo database and configuring it to use AvaTax services and features within Odoo

Note: Test the module before deploying in live environment. All changes to the AvaTax settings must be performed by a user with administrative access rights.

Installation

Download the AvaTax Module
Extract the downloaded file
Upload the extracted directory into your Odoo module/add-on directory
Restart your instance of Odoo
Log in as an Administrator
Navigate to: Settings>>Installed Modules and search 'AvaTax' in the search field
Click Install button

To Configure AvaTax API

Navigate to: Accounting -> Configuration -> AvaTax -> AvaTax API
Click the Create button.
Fill out the form with your Company Code, Account Number, and License Key as provided with your Avalara account
Fill out proper service URL provided to you by Avalara (developer/testing server or production URL)c
Click the Test Connection button
Click Save button

Some other configuration

Adapter

Request Timeout (default is 300ms)
Enable Logging

Address Validation

Attempt automatic address validation (this option performs automatic validation when performing tax computation)
Validate on save for customer profile (automatically attempts to validate on creation of customer profile update and creation, last validation date will be visible and stored)
Force address validation on customer profile (if validation for customer is required but not valid, the validation will be forced)
Return validation results in upper case (validation results will return in upper case form)

Avalara Submissions/Transactions

Request Timeout (default is 300ms)
Order-level -- All items on order are calculated as one transaction.
Line-level -- Each line item in an order is calculated, displayed, and transacted separately.
Enable UPC Taxability -- This will transmit Odoo’s product ean13 number instead of its Internal Reference. If there is no ean13 then the Internal Reference will be sent automatically.

Countries

Add or remove applicable countries -- The calculator will not calculate for a country unless it’s on the list.

Disable

Disable Avalara Tax Calculation and reporting (reporting to Avalara’s dashboard and tracking)
Disable Avalara Tax reporting only

Configure Exemption Codes

Exemption codes are allowed for users where they may apply (ex. Government entities). Navigate to: Accounting >> Configuration >> AvaTax >> Exemption Code The module is installed with 16 predefined exemption codes. You can add, remove, and modify exemption codes.

Product Tax Codes

Create product tax codes to assign to products and/or product categories. Navigate to: Accounting >> Configuration >> AvaTax >> Product Tax Codes From here you can add, remove, and modify the product tax codes.

Configure Taxes

The AvaTax module is integrated into the tax calculation of Odoo. AVATAX is automatically added as a type of taxes to be applied. You can configure how AVATAX integrates within the Odoo system.

Configure AVATAX Tax Type

Navigate to: Accounting >> Taxes
Select AVATAX from the list view (automatically added on module install).
Click the Edit button Configure the AVATAX Tax Type with the proper tax account configuration for your system.

Note: Upon initial install the settings will be blank. The above image shows an example configuration.

Product Category Configuration

Products in Odoo are typically assigned to product categories, AvaTax settings can also be assigned to the product category. when a product category is created.

Create New Product Category

Navigate to: Inventory >> Configuration >> Products >> Product Categories
Click Createbutton

Configure Product Category Tax Code

Under AvaTax: Properties >> Tax Code
Select the desired Tax Code

Product Configuration

Individual products default to the tax code assigned to their product category, however you can change the tax codes if needed. Tax calculations for a specific product can be disabled and will default to the product tax settings for the product category it belongs to.

Create New Product

Navigate to: Sales >> Products >> Products
Click Create button

Configure Product Tax Code

Under Category, select a Product Category
Under AvaTax Properties, the Tax Calculation check box is checked by default
If you want to change the Tax Code defined by the Product Category, navigate to: AvaTax Properties > Tax Code

Customer Configuration

Properly configuring each customer ensures the correct tax is calculated and applied for all transactions.

Create New Customer

Navigate to: Sales >> Customers
Click Create button

Configure Customer Address

Enter Customer Address in the AvaTax tab
Click Validate button

Address Validation

The AvaTax Module will attempt to match the address you entered with a valid address in its database. Click the Accept button if the address is valid.

Tax Exemption Status

If the customer is tax exempt, check the box under Tax Exemption >> Is Tax Exempt and select the desired Tax Exempt Code from the dropdown menu.

Customer Invoices

The AvaTax module is integrated into Customer Invoices and is applied to each transaction. The transaction log in the Avatax dashboard shows the invoice details and displays whether the transaction is in an uncommitted or committed status. A validated invoice will show an Uncommitted status and a paid invoice will show a Committed status.

The module will check if there is a selected warehouse and will automatically determine the address of the warehouse and the origin location. If no address is assigned to the warehouse, the company as its origin.

Discounts are handled when they are enabled in Odoo's settings. They will be reported as a net deduction on the line item cost.

Create New Customer Invoice

Navigate to: Accounting >> Customers >> Customer Invoices
Click Create button

Register Payment

To complete the invoice, click the Register Payment button.

Validate Invoice

Click the Validate button to finalize the Customer Invoice

Customer Refunds

Odoo applies refunds as opposed to voids in its accounting module. As with customer invoices, the AvaTax module is integrated with customer refunds and is applied to each transaction. Refunded invoice transactions will be indicated with a negative total in the AvaTax interface.

Initiate Customer Refund

Navigate to: Accounting >> Customers >> Customer Invoices
Select the invoice you wish to refund
Click Refund Invoice button

Create Refund Invoice

Under refund, select Create a Draft Refund from the dropdown
Click Create Refund button

Note: You will be taken to the Customer Refunds list view

Validate Refund

Select the Customer Refund you wish to validate, review and then click Validate button

Register Refund Payment

Click Register Payment button to complete a refund

Sales Orders

The AvaTax module is integrated into Sales Orders and allows computation of taxes. Sales order transactions do not appear in the in the AvaTax interface.

The information placed in the sales order will automatically pass to the invoice on the Avalara server and can be viewed in the AvaTax control panel.

Discounts are handled when they are enabled in Odoo's settings. They will be reported as a net deduction on the line item cost.

Create New Sales Order

Navigate to: Sales >> Sales >> Sales Orders
Click Create button

Compute Taxes with AvaTax

The module will calculate tax when the line item is updated (refreshed) or when the sales order is confirmed. At this step, the sales order will retrieve the tax amount from Avalara but will not report the transaction to the AvaTax dashboard. Only invoice, refund, and payment activity are reported to the dashboard.
The module will check if there is a selected warehouse and will automatically determine the address of the warehouse and the origin location. If no address is assigned to the warehouse the module will automatically use the address of the company as its origin. Location code will automatically populate with the warehouse code but can be modified if needed.