Avalara is a developer of a wide range of sales and use tax systems, exemption certificate management utilities and related services. The company’s flagship automated sales and use tax system, AvaTax OnDemand, provides a web-based database of sales tax rates, rules and special taxation issues that integrates with a business’ accounting, sales and e-commerce platforms to automatically determine taxability and apply rates.
The vendor also offers an installed version of the AvaTax system. In addition to these programs, Avalara provides outsourced sales tax return preparation, filing and payment services and is a Streamlined Sales and Use Tax Certified Service Provider. In addition to the automated AvaTax system, which can handle all U.S. sales taxing jurisdictions, Avalara produces TrustFile (reviewed on page XX), which is geared toward businesses with sales tax compliance issues focused on a few states.
Basic System Functions
As with all automated sales tax systems that tie into a business’ sales and accounting systems, the initial setup of AvaTax requires integration of the systems and mapping of data and accounts. Avalara has standard integrations for most small and mid-sized business programs, and its staff can assist with implementation. Once the program is set up, it automatically runs in the background of all sales, estimates and web-based transactions, determining nexus and tax rates, and also verifying special taxability rules, exempt product types and holidays.
Since most day-to-day sales tax functions of the program are performed automatically, the system’s browser-based interface focuses on using system utilities and accessing management and review functions. In the Admin Console, a new tabbed structure eases accessing transactions, returns, business information, reporting, exemption certificate functions, backdated transactions, and tools and settings. A Dashboard view gives a summary of tax liability information along with quick access to live data reports that enable users to drilldown to transaction level.
AvaTax can be used to support any number of companies, and the web-based platform version allows it to easily handle businesses with multiple geographic locations, including overseas. Users can log in and manage sales tax and return processes from virtually any location, including mobile devices with full web capabilities. 4.75
AvaTax supports more than 14,000 North American jurisdictions with sales and use tax, and with the company’s AvaTax Global, users can manage VAT for 39 countries. For U.S.-based transactions, the program automatically checks the buyer address using ZIP+4 and geographical variables to determine appropriate tax rates and special taxation rules, performs calculations on a per-item basis, and applies rates into the transaction. Reports maintain the ability to drilldown to these line item details. With the web-based AvaTax OnDemand system, all rate tables, rules and taxability matrices are maintained by Avalara.
For filing and payment, AvaTax users can prepare forms in-house using AvaFile Forms or can outsource these compliance tasks to Avalara by using the AvaFile Managed Returns system. No integrated filing and payment system is available within the program for direct business use. Through AvaFile Forms, the business can have signature-ready forms automatically populated with data from AvaTax. Then, after guided review and verification, appropriate entries are made to the GL, and return filing and payment is handled by Avalara’s U.S.-based staff. The system also includes integrated alerts and reminders for due dates and filing deadlines, as well as access to tax code and rules for each jurisdiction. With the Managed Returns service, all of the compliance processes are managed by Avalara, but with the business retaining the ability to review returns for accuracy and access detailed reporting. 4.75
Sales and use tax data can be output into common file formats and reporting, including detail and summary sales tax reports for the company or jurisdictions, and can be output to Word, Excel and PDF. The system is available for integration with all Microsoft Dynamics systems; NetSuite; Sage Accpac; Sage MAS 90/100/500; Intuit Pro, Premier and Enterprise; and most e-commerce systems and point-of-sale programs. Data bridges that offer varying degrees of integration are also available for more than 80 other business applications. 5
Both the web-based and locally installed versions of AvaTax provide strong assistance features, including form instructions, right-click menus, and field-sensitive guidance. The company offers a very broad support website that houses demos, whitepapers, articles, research and user forums, as well as access to training options. Live phone-based and web chat technical support is included in system pricing. 4.75
Summary & Pricing
AvaTax brings the benefits of a comprehensive automated sales and use tax system to the small and mid-sized market, providing integration with virtually all business software in these markets, from QuickBooks on up. Pricing is based on the accounting package the business is using and on the volume of transactions, with a version for QuickBooks and about 700 annual transactions costing $350 per year. For a larger entity with around 7,000 annual transactions, the pricing would be about $0.35 per transaction. The system is best suited to small and mid-sized retailers, especially those with growing e-commerce activity.
2010 Overall Rating 4.75