Configure and Use AvaTax

Applies toAvalara Tax

AudienceAll users

Last updatedMay 13, 2026

This guide explains how to configure Accounts, Items, Orders, and Invoices to work properly with Avalara AvaTax, and how to test and verify tax transactions end-to-end.

---

1. Setup

1.1 Account Setup

On the Account page, populate the following fields:

Field	Purpose
Entity/Use Code	Used by Avalara to determine tax or exemptions.
Account Number	Optional, sent to Avalara as reference.
Ship-to Address	Required for correct tax calculation.
Alternate Shipping	Specify if shipments use different addresses.

If you use Alternate Shipping Addresses

Add Entity/Use Code to the Alternate Shipping Address page layout.

---

If sales tax is still being calculated for a specific jurisdiction, it is likely that SST (Streamlined Sales Tax) is enabled for that jurisdiction. In this case, you must create and maintain a customer tax exemption certificate in the Avalara portal.

Please ensure the following configuration:

• The Customer Code in Avalara must match the Account Number on the Salesforce Account record.

---

1.2 Turn Off GoldFinch Sales Tax

If you previously used the GoldFinch Sales Tax module:

1. Go to all Account records and Alternate Shipping records.

2. Uncheck the Tax Liable field.

This ensures:

• GoldFinch’s native tax logic is bypassed.

• Avalara becomes the exclusive source of tax calculation.

• Prevents duplicate or unintended tax computation.

---

1.3 Item Setup

On the Item page, populate:

• AvaTax Tax Code

Important Behavior

• If an item does not have a specific Tax Code, Avalara assigns its default Tax Code = P000000, treating it as taxable tangible personal property (usually the highest rate).

• Therefore, all non-taxable items MUST have a proper Tax Code.

Scenario	Recommended TaxCode	Description
Non-taxable product (services, exempt goods)	NT	Non-taxable item
Tax-exempt sale to reseller or nonprofit	P000000 (General) + EntityUseCode	Tax is zeroed out by certificate or entity code
Freight or non-taxable charges	FR020100 or NT_FRT	Identifies non-taxable shipping/handling

🔎 Find more codes: Tax Codes Search | Avalara

Excluding Items from Avalara

If you do not want Avalara to calculate tax on certain items (e.g., Z-Prepayment):

→ Check Do Not Integrate with Avalara on the Item page.

This prevents the item amount from being included in Avalara reporting.

---

2. Sales Order

• GoldFinch automatically calculates Sales Tax using Avalara when an order is created or updated.

• You may also click Calculate Tax to trigger manual calculation.

Visibility in Avalara

By default, only posted Sales Invoices and Credit Memos appear in the Avalara portal.

To also send Sales Quotes and Sales Orders to Avalara:

Add the following custom setting:

Name	Value
AvaTaxSendToPortalSQSO	True

Sales Line Calculations

GoldFinch automatically updates:

• Sales Tax Amount

• GoldFinch Tax

• Tax %

• Line Amt Inc. Tax

---

3. Sales Invoice

• GoldFinch automatically recalculates tax when an invoice is created or updated.

Posting Behavior

Action	Avalara Function Called
Post Sales Invoice	Commit Tax
Unpost Sales Invoice	Cancel Tax

You CANNOT re-post the invoice using the same invoice number after unposting. Avalara does not allow it.

---

3.1 Using Temp Invoice to Auto-Assign the Next Invoice Numbers

If you want GoldFinch to assign the next invoice number upon posting:

1. Add Temp Invoice to the Edit Sales Invoice → Billing Tab fieldset.

2. Check the Temp Invoice on the invoice.

3. When posting, GoldFinch will replace the invoice number with the next Invoice Number.

---

3.2 Manual Tax Buttons

Button	Function	Permissions
Calculate Tax	Recalculates tax	All users
Commit Tax	Manually commits tax to Avalara	Requires Allow AvaTax Override in User Setup
Cancel Tax	Manually cancels the committed tax	Requires Allow AvaTax Override in User Setup

Manual commit/cancel should be used only for troubleshooting.

---

4. Test Transactions

Use the following tests to ensure Avalara connectivity and correct behavior:

Transaction	Actions to Test
Sales Order	Calculate Tax
Return Order	Calculate Tax
Sales Invoice	Calculate Tax → Post → Unpost to Cancel Tax
Sales Credit Memo	Calculate Tax → Post → Unpost to Cancel Tax

---

5. Verify Avalara Calculations

• Log in to your Avalara environment.

• Review the committed transactions.

• Confirmed checklist:

  • Confirm addresses
  • Confirm tax amounts
  • Confirm exemption handling
  • Confirm jurisdiction breakdowns
  • Confirm Credit Memo shows a negative Amount
    • If Credit Memo Amount is not negative, check the mapping

---

6. How to Cancel Tax After It Is Reported

If tax has already been reported to Avalara (for example, after filing):

• Do NOT unpost the Sales Invoice.
  Unposting will reverse accounting entries in GoldFinch, but it will not reverse tax liabilities already reported to Avalara.

Proper Method to Reverse Sales Tax

Instead, you should:

• Create a Return Order, then

• Create and post a Sales Credit Memo

Or:

• Create and post a Sales Credit Memo directly

When the Credit Memo is posted, Avalara will recognize the negative transaction and properly reverse or adjust the tax liability in the appropriate reporting period.

---

7. Supported Tax Types in Avalara and GoldFinch ERP

Tax Type	Avalara Tax Engine	GoldFinch Avalara Integration
US Sales Tax	Yes	Yes
Canada Sales Tax (GST, PST, QST, HST)	Yes	Yes
US Purchase Tax	Yes	No
Canada Purchase Tax	Yes	No

Summary

• Avalara Tax Engine supports both Sales Tax and Purchase Tax in the United States and Canada.

• The current GoldFinch–Avalara integration supports Sales Tax only (US and Canada).

• When using Avalara Sales Tax with GoldFinch:

  • Avalara returns a lump-sum sales tax amount per transaction.

  • Sales tax cannot be posted separately by individual jurisdictions (state, county, city).

  • Jurisdiction-level reporting must be run in the Avalara portal.

  • If jurisdiction-level GL separation is required, manual journal entries must be posted to reclassify Sales Tax Payable.

• When using GoldFinch native Sales Tax:

  • Sales tax can be posted by jurisdiction.

  • Different jurisdictions can be mapped to different GL accounts.

• Purchase tax calculation through Avalara is not supported in the current GoldFinch integration.

---

8. Can GoldFinch ERP Use Both Avalara Sales Tax and GoldFinch Out-of-Box Sales Tax?

Technically, yes.

However, this requires careful design and thorough testing to avoid conflicts, duplicate calculations, or reporting inconsistencies. Proper configuration and clear ownership of tax logic are essential before enabling both systems simultaneously.

---

Article Configure-and-Use-AvaTax  ·  Last updated May 13, 2026 · GoldFinch ERP Help Center