What is Avalara Magento 2 and what does it do?

Complying with tax regulations is always easier said than done. Because of the nature and constant change of tax regulations put businesses at risk of tax non-compliance. Therefore, using Avalara Magento 2 is an effective solution to help you thoroughly solve tax problems. Through this article, we will provide you with the necessary information that you should know about Avalara Magento 2.

Table of content

1. What is Avalara tax software? 2. Companies using Avalara tax software 3. What does Avalara do to you in Magento? 4. Avalara Magento 2 extensions

What is Avalara tax software?

For many people, tax compliance is a difficult and complex task. So Avalara is software created to make it easier for you to deal with your taxes. Avalara software helps businesses automate taxes with many outstanding features such as real-time tax calculation and automatic tax filing.

You can imagine that every government or territory that wants to earn tax revenue will have its own mechanisms and regulations. And managing all that information is a very difficult task. So using Avalara-consultation on sales tax and use tax will help you a lot in your business.

For example, if you need to sell something in Sydney, but you don’t know the local sales tax. As usual, you will have to find this local sales tax information and then apply it to your e-commerce store. Same with any other region in the world. However, if you use the sales taxonomy in Avalara and then enter the address where you plan to sell your item, Avalara will automatically give the correct tax rate for your product in the geographic area that you intend to sell.

Use their table attached to every invoice and it shows the type of tax to be charged. It will then put your information in their dashboard and they will file all the sales tax returns for you. For some retailers with a size spread across many territories, paying taxes in all those regions is not an easy job if it is not automated. Avalara can help you with this thanks to its ability to file all tax returns based on the shipping address for each geographic region in which the product is sold. In addition, Avalara relies on rates or addresses to automatically collect prepaid sales tax.

From real life examples we can see that with Avalara tax is done at a much higher rate than what you can do manually. Avalara is a winner for us because it keeps our customers compliant and it integrates nicely with Magento.

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Companies using Avalara tax software

Nowadays there are many companies that trust and use Avalara in their tax calculation and management. Here are a few prominent companies that are using Avalara that we would like to share with you:

No.	Name	Industry	Revenue	Overview
1	Thread Wallets	Retail and e-commerce	$12.2M	Thread Wallets is a US-based company, with its headquarters in Provo, Utah. It offers unique wallet designs, wallet repairs, and other accessories.
2	Yesway	Retail and e-commerce	$133M	This is a retail business that places great emphasis on convenience for their customers. With smart store layout, yesway customers can choose products and pay quickly.Yesway is expanding its geographic reach with 150 stores spanning multiple regions.
3	Berkshire Blanket & Home Co.	Retail and e-commerce	$31.32M	Founded in 1993, Berkshire Blanket & Home Co. is a very large furniture company. The company supplies more than 130 million high-quality blankets, cushions, and other household items to retailers around the world.
4	ProviNET Solutions		$3.24M	ProviNET Solution is a provider of technology services ranging from consulting to managed IT services to virtual private cloud hosting.Based in the Chicagoland area, ProviNET’s customers include not only businesses in the area but also hundreds of nonprofit organizations across the United States.
5	Hickory Farms	Retail and e-commerce	$146.2M	Hickory Farms is an American gift retailer based in Chicago. Hickory Farms has been present in more than 750 retail shopping locations. This company specializes in providing products such as food gifts and local specialties.
6	McCaffrey’s	Supermarkets	$127M	McCaffrey’s Food Markets is a regional supermarket chain located in the Northeastern United States. Their stores have up to 60,000 different items at all times and over 100,000 items in their point of sale (POS) system.

What does Avalara do to you in Magento? 

Tax management is a very complicated job in Magento. But with the benefits that Avalara Magento 2 provides below, your tax-related jobs will be much simpler.

Validate addresses and improve rate accuracy

To reduce the risk of wrong delivery, eliminating the need for bundled services, Avalara Magento 2 offers you address validation. This makes it easy to verify, correct, and format addresses across more than 13,000 US tax jurisdictions.

Compared to a ZIP code, this ensures that taxes are applied more accurately.

Help your B2B store provide a better customer experience

Your customers can enter a certificate number in their account profile, which Avalara will keep on file in Magento and can be easily accessed at checkout for a sales tax exemption.

Easily manage taxable rules for a large product inventory

Avalara Magento 2 offers you a catalog of taxable rules spanning vast territories. This helps you apply the right tax rates across thousands of SKUs, including tax changes and sales tax exemptions.

Better assessment of tax obligations in each state

Operating stores in too many regions will make it difficult for you to manage your tax obligations, thereby delaying your tax payment. As a result, Avalara Magento 2 keeps track of your store’s tax liabilities in each region in which you do business and have tax liabilities. From there Avalara Magento 2 will warn you when you are about to fulfill your tax obligations from the detailed reports this application obtains.

Easy to operate in the global market

Selling around the world exposes you to many risks such as additional shipping charges, fines, customs delays. Since then, the cost of the product is unexpectedly high, making your customers unsatisfied. To avoid such situations, Avalara calculates import duties and customs duties in real-time at the point of sale and collects them at checkout. This helps customers clearly identify the amounts they have to pay.

Submit application and transfer money automatically

Avalara Magento 2 works with the local and government authorities in your area of tax liability to file and pay on your behalf. When it’s time to file, you can adjust a worksheet and pay an amount toward your total tax liability.

Collaboration with other business systems you already use

With over 1,000 signed integration partners, you get a full omnichannel solution using Avalara’s SaaS-based tax platform. Avalara is also one of the most commonly used tax management software in Magento. Can’t find integration for your app or doesn’t work? Build an app with Avalara’s advanced API. 

With over 1,000 signed integration partners, you get a full omnichannel solution using Avalara’s SaaS-based tax platform. Avalara is also one of the most commonly used tax management software in Magento. Can’t find integration for your app or doesn’t work? Build an app with Avalara’s advanced API. 

Avalara Magento 2 extensions

Avalara AvaTax provides cloud-based sales and uses tax calculation with comprehensive, up-to-date tax rates that are automatically pushed to your shopping cart or invoicing system. When using this add-on you will only pay for what is right for your business. This Avalara service offers a variety of usage plans suitable for any business.

Avalara Returns prepares and files sales and uses tax returns based on your sales data. Avalara Returns also helps you transfer payments, across multiple jurisdictions in each filing cycle

Avalara CertCapture collects, stores and renews exemption certificates and other tax documents in the cloud. CertCapture syncs with AvaTax to automatically waive transactions. The price of this service completely depends on each business. Costs include one-time setup fees, fees associated with the number of certificates you manage, and any Professional Services you use.

AvaTax Cross-Border creates a better online shopping experience by offering clear pricing to international customers by charging customs and import duties at the point of sale. This avoids additional costs from carriers that make your customers unhappy.

Avalara’s Managed Tariff Classification automates the complex process of assigning country-specific Harmonized System (HS) codes to products in their ever-changing product portfolios. online retailers, reducing the risk of customs delays and compliance errors while helping to protect hard-earned cross-border sales. This service provides you with 3 different packages depending on your usage needs.

Final Thoughts

For your business to operate in the most effective way, tax management is one of the indispensable jobs. And this is also not an easy job for retailers on Magento 2 without supporting tools. Hopefully, after reading this article you have the necessary information for using Avalara Magento 2 to make tax management in your business easier.