From the August 2008 Review of
Sales & Use Tax Systems
As an integrated part of a business’ financial applications, AvaTax
is a web-based utility that provides real-time sales and use calculation to
the sales and invoicing programs. It helps these systems make appropriate account
postings and automatically prepares sales tax reports for all jurisdictions
with liability in a given period. It is designed for single business entities
or multiple related businesses being managed with one or more accounting systems.
Avalara is refreshingly upfront with its pricing paradigm for AvaTax, providing
a quick calculator tool on its website to show approximate pricing based upon
the number of annual transactions and the financial system in use by the company.
For small concerns using QuickBooks and having up to 720 transactions per year,
the pricing can start as low as $342 per year with a one-time $89 activation
fee and additional transactions costing $0.60 each. For up to 7,200 transactions
per year, pricing would be $2,495 annually, plus $795 activation and $0.40 per
additional transaction. Several other small business and enterprise-level accounting
packages, e-commerce systems and a software development kit are also supported.
A product taxability option and a managed compliance service are also available
through which the vendor manages all filing and remittances and notice management.
AvaTax is certified with the Streamlined Sales Tax Governing Board.
Navigation & Data Entry — 5 Stars
The AvaTax Dashboard provides supervision of the program, access to reporting
features, and drilldown functionality. From these views, users can also drill-across
to jurisdictional liability summaries and details. AvaTax also enables users
to view sales tax information from remote locations.
As an automated, on-demand sales tax system, the business’ sales platform,
e-commerce shopping carts or accounting system calls out to AvaTax’s web-based
database via a web service and returns the correct sales tax for that transaction
in real-time. Sales tax calculations can also be performed in batch. As a software-as-a-service
(SaaS) solution, Avalara maintains all rates and boundaries, sales tax holidays,
special exempt items and state/locally defined non-taxable products. AvaTax
offers integration with several accounting, e-commerce and point-of-sale systems.
The system provides current and historical sales tax rate information for more
than 12,500 state, county, local and special tax districts across the United
States and Canada, using ZIP+4 and the more precise AvaLocate function to determine
appropriate liability. AvaTax’s managed compliance service provides all
required forms and electronic filing and payment capabilities. Generally, no
manual data entry is required, with data automatically flowing into and populating
a liability worksheet. Within AvaTax, authorized users can override transferred
or calculated data if desired with an audit trail logging all system activity,
but most user processes are review functions or managerial tasks such as reconciliation,
analysis and supervision. Reports can be output into Excel and other formats.
Filing, Electronic Compliance & Payment — 4 Stars
With the managed returns service, forms are automatically populated based on
an approved liability worksheet, or users can easily prepare returns for remittance
using the reporting features. Additional filing solutions are available. The
program does not offer due-date monitoring or alerts, but Avalara offers the
managed returns service, which is essentially an outsourcing of compliance to
the vendor. Through this service, Avalara mails or e-files returns (as preferred
by the taxing entity) and remits appropriate payment to these authorities.
Rate Updates — 5 Stars
As an online program, AvaTax and its thousands of tax rates are maintained by
the staff at Avalara and updated as necessary. Changes are transparent to the
user, with their accounting system automatically applying the new current tax
rate to each transaction processed, but also enabling use of prior-period rates
for special transactions.
Help/Training — 4.5 Stars
General Help features within AvaTax provide guidance, and the company’s
support website offers a knowledgebase, FAQs, submission of support tickets
and other information. The company also offers free training options through
its Avalara University, with regularly scheduled online weekly classes providing
setup and use tips. Classroom and on-site training options are also available
for nominal fees. Technical support via phone and e-mail during scheduled business
hours is included in pricing. Premium support options are also available, including
24×7 technical support.
Relative Value — 4.5 Stars
With its mid-range price point based on transaction levels and accounting systems,
AvaTax has bridged a gap by bringing an automated, web-based, comprehensive
sales tax application to the small and mid-sized market. The program is especially
well-suited to businesses engaged in e-commerce activities or others that have
dynamic sales that can involve multiple changing taxing jurisdictions in any
given period. Through integration with the business’ ERP, AvaTax simplifies
the often time-consuming process of sales tax management and helps to ensure
2008 Overall Rating: 4.5 Stars