Avalara integration guide

Overview

The Avalara integration lets you calculate sales tax accurately using AvaTax. AvaTax calculates sales tax for businesses that operate in simple or complex tax areas, or sell items across various zip codes.

Things to know

• Avalara's AvaTax calculates sales tax on estimates and invoices. 

• Avalara's AvaTax keeps track of frequent changes so you may file period end sales tax reports more efficiently and easily. 

• Avalara integration sends invoice details directly from ServiceTitan to Avalara.

• Avalara's AvaTax automatically files your sales tax.

• The Avalara integration does not support the Application for Payment workflow.

Integration options

To help reduce costs, you have two options for integrating ServiceTitan with Avalara's cache feature. This feature is designed to minimize the number of API calls to Avalara, which can lower your Avalara usage charges.

Without cache integration

With this option, ServiceTitan requests a tax update from Avalara each time you edit an invoice, add or modify tasks, change prices, or update invoice details. This keeps the tax amount accurate and current at all times, but it results in frequent API calls and higher costs.

With cache integration

With this option, ServiceTitan makes a single API call to Avalara when the job is booked to create the transaction and apply the maximum local tax rate to the invoice. Precise tax details are requested only when you email, print, collect payment, or when a customer views the invoice online. This ensures accurate tax is shared externally, though the tax shown on the invoice page may not be current between those actions.

Use the Calculate Tax option on the estimate screen to calculate taxes on the estimate before you sell or convert the estimate. This prevents multiple API calls from being made when estimate items are added or edited, causing taxes to be frequently recalculated.

Below is a list of actions that triggers a tax calculation or recalculation on an invoice when you're using this option:

• Present estimate

• Sell estimate

• Email estimate

• Print estimate

• Collect deposit on estimate

• Complete job

• Collect payment on invoice

• Email invoice

• Print invoice

• Post invoice

• Email statement

• Print statement

• Email project

• Print project

Before you get started

Before setting up your Avalara integration with ServiceTitan, make sure your Avalara account is set up successfully and you have the following details from Avalara:

• Account number

• License key

• Company code

Set up Avalara integration

When you set up Avalara AvaTax in ServiceTitan, you only need to configure one integration. However, you can choose to create multiple integrations, depending on which business units the integration is mapped to. To configure Avalara AvaTax for your ServiceTitan account, complete the following:

1. Configure Avalara AvaTax for your ServiceTitan account.

2. Understand your tax code levels in pricebook.

3. Assign Avalara tax codes for each item in pricebook.

Step 1: Configure Avalara AvaTax for your ServiceTitan account

1. Go to the navigation bar and click Settings . 

2. In the side panel, go to Integrations > Avalara.

3. Enter details of your Avalara account, including:

   1. Account Number: Your Avalara account number. To find your account number, log into Avalara. Your account number can be found on the top right corner of the home page.

   2. License Key: The license key for your account provided to you by Avalara.

   3. Service URL: Select a production or development server.

   4. Company Code: The company code that allows Avalara's AvaTax to access your company's tax profile. To find your company code, log into Avalara and go into the Organization tab.

      Note: The Company Code is not the same as the Company ID.

   5. Cutoff Date: The date from which tax calculations using Avalara begin. Taxes are only calculated for invoices dated on or after this cutoff date.

   6. Business Units: Select the business units linked to this Avalara integration.

   7. Enable Sales Tax Calculation: Select this to use the Avalara integration.

   8. Report to Avalara: Select this to submit your invoices to Avalara. Do not select this option if you do not use Avalara to file your sales tax reports.

   9. Do not send requests to Avalara for $0 invoices for jobs created from membership appointments: Select this if you do not want to submit your $0 invoices from membership jobs to Avalara.
      

4. Click Test Connection to test your connection to the AvaTax service and verify your credentials.

   1. If you get a Connection Successful message, continue to the next step.
      

   2. If you get a Connection Failed message, go back to step 3 to ensure your Avalara account details are entered correctly. 

5. When you get a Connection Successful message, click Save.

Step 2: Understand your tax code levels in pricebook

For services, materials, and equipment, you can set up your tax codes in the following levels:

• Item

• Subcategory

• Category

Avalara always attempts to pull the tax code from the item level first. If no tax code is assigned at the item level, Avalara then attempts to pull the tax code at the subcategory level. If no tax code is assigned at the subcategory level, then Avalara pulls the tax code from the category level.

When tax codes are assigned at all three levels, Avalara pulls from the item level first, then subcategory, and finally at the category level.

If all the items within the category have the same tax code, you can assign the tax code to the category rather than each individual item.

Step 3: Assign Avalara tax codes for items in pricebook

Avalara needs a tax code assigned for each item in your pricebook to determine the correct sales tax. If a tax code is not assigned to an item, Avalara pulls the tax code assigned to the subcategory or category.

To assign tax codes:

1. Go to the navigation bar and click Pricebook. 

2. In the side menu, click Service, Materials, or Equipment.

3. Search for the item you want and click Actions  > View/Edit.

4. On the edit screen, enter the Avalara tax code in the following fields:

   1. Avalara Tax Code (Residential): This is the default product code for each item within this category. If only the Residential field is provided, this code is used for both commercial and residential jobs.

      Note: Click Find Tax Codes to get AvaTax codes for goods and services. These codes determine the taxability of the goods and services you sell.

   2. Avalara Tax Code (Commercial): This field is optional. This is the product code for each item within this category. 
      

5. When finished, click Save.

Select reason for tax exempt customer and location

When customers or locations are marked as Non-Taxable, you must enter an Avalara Entity Code to provide an exemption reason. 

Note: If a location address fails to validate, an error message appears stating that the sales tax cannot be correctly calculated because the address cannot be validated.

To select an Avalara Entity Code on tax exempt customer or location: 

1. Search for and go to the customer or location record. 

2. On the customer or location record, click Edit  .

3. On the edit screen, select an exemption reason on the Avalara Entity Code dropdown.
   

4. When finished, click Save.

Use Avalara address validation tool when booking a job

When booking a job, use Avalara's address validation tool to confirm that sales tax can be calculated at the location. If Avalara cannot verify the location address, the job cannot be booked. 

To use Avalara's address validation tool: 

1. On the call screen, click + New Customer

2. On the Create Customer screen that opens, enter the location details. 

3. Click on the Avalara address validation tool.

   1. If the address is validated, continue to the next step. 

   2. If the address is not validated, an error message states Unable to book this job because Avalara cannot verify the address for sales tax purposes. 

4. When finished, click Create Customer.

Modifying a posted invoice

If an invoice is created before the Avalara integration is enabled, the invoice is not updated with Avalara tax calculations. If the invoice is updated later, Avalara tax calculations are applied to the invoice. 

When an invoice is posted, ServiceTitan commits the transaction in Avalara. If you later unpost the invoice, the transaction should be uncommitted in Avalara. 

Note: Once Avalara files the sales tax report for an invoice, you can no longer unpost the invoice in ServiceTitan to make changes.

Tax calculations in ServiceTitan Mobile

If you are using the Avalara integration with ServiceTitan Mobile, the following occurs:

• Technicians can still build estimates. Sales tax is based on the stored general sales tax rate for goods and services, as saved when booking a job. 

• Technicians can still sell estimates. A disclaimer appears at the bottom of the page with the following message: ServiceTitan is unable to connect to the server and get the actual tax rates. The tax shown here is an estimate. This amount will be updated with the actual tax rate once a connection is established. 

• Technicians can still accept payment and complete a job. If a customer pays an invoice total before sales tax has been calculated, the above disclaimer will appear on the Invoice screens so that the customer understands that the final amount will change. 

• ServiceTitan updates the sales tax on the invoice based on Avalara's tax calculations when the internet connection is re-established.

Tax calculations in Application for Payment (AFP)

If you are using the Avalara integration with Application for Payment, the following occurs:

• To use Avalara to calculate sales tax for Application for Payment, enable the Avalara tax option in the Application for Payment settings. You can use the global AFP settings or in the individual project AFP settings page.

• The Application for Payment preview won't be available but sales tax will appear when you print the document.

• Taxes are shown in a separate line.

Want to learn more?

• See Accounting

• See Accounting Integrations