Tax and AvaTax Operations

Documentation Index

Fetch the complete documentation index at: https://docs.arcuserp.com/llms.txt

Use this file to discover all available pages before exploring further.

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Open the Tax Settings

1. Open Settings.
2. Choose Entity Settings.
3. In the left navigation, open the Tax group.
4. Select Tax Configuration or AvaTax.

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What Each Tax Page Does

The Tax group has two settings pages. Use them together.

• Tax Configuration: confirms connection health, company code, environment, and address validation behavior.
• AvaTax: explains the document strategy, marketplace tax routing, last tax sync event, manual recovery tools, and recent AvaTax errors.

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Address Validation and Jurisdictions

Arcus uses the shipping address to determine the tax jurisdiction. The same address validation flow also supports shipping workflows, so clean address data matters before tax, rate shopping, labels, and fulfillment.

• A complete ship-to address needs street, city, state, ZIP, and country.
• Address validation can suggest corrected address details before a user saves or uses the address.
• Commercial or residential classification can affect carrier charges and shipping rules.
• If an order has no complete shipping address, tax calculation cannot finish.

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How Tax Moves Through an Order

Tax is calculated while the order is still changing, then committed only when the sale reaches a final point. That keeps draft edits flexible while protecting filing records from duplicate commits.

• Draft and pricing work: Arcus previews tax so users can see totals before fulfillment or final invoice steps.
• Line, address, customer, shipping, and exemption changes: open orders can recalculate tax when those values change.
• Final commit: direct-sale orders are committed to AvaTax when the order reaches the configured finalization path.
• Retry safety: once an order has a committed AvaTax transaction, repeat commit attempts return the existing result instead of filing a duplicate.
• Cancellations and voids: voiding a committed order can void the AvaTax transaction when the workflow requires it.
• Returns: post-commit returns can create a return adjustment so tax liability is reduced against the original sale.

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Document Type Strategy

AvaTax shows this in more technical language because it matters for filing: draft calculations use an uncommitted sales order style preview, while final sales use a committed invoice style transaction. In daily operations, the important rule is simple: edits recalculate before finalization, and finalization commits once.

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Direct Sales vs Marketplace Sales

Arcus treats direct sales and marketplace orders differently so sales tax is not filed twice. Marketplace facilitator rules determine whether Arcus commits to AvaTax or records the tax as passthrough liability.

• Direct sales: phone, counter, email, B2B portal, and other non-marketplace sales are committed to AvaTax when finalized.
• Amazon and eBay: treated as marketplace facilitator passthrough. The marketplace collects and remits sales tax.
• Shopify: can be mixed. Shopify-collected lines stay passthrough, while merchant-collected lines can be committed by Arcus.
• Unknown marketplace sources: should be reviewed before relying on automated filing behavior.

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Tax Exempt Customers

Tax exemption is controlled from the customer account and can also be reviewed on the order. Arcus requires a real exemption basis before an account or order can be marked tax exempt.

• Set a Tax Exemption Code on the customer account before enabling the tax exempt toggle.
• Resale and Direct Pay exemptions require a tax number.
• Account tax changes can recalculate open quotes, sales orders, and invoices that still allow edits.
• Already finalized or committed documents should be corrected through the proper void, return, or reissue workflow.
• Upload and retain exemption certificates according to your internal policy.

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Product and Line Tax Behavior

Product setup affects how lines are sent for tax calculation. Good product data prevents wrong tax categories and reduces manual correction later.

• Product Tax Code supplies the AvaTax category used for jurisdiction-specific taxability.
• Charge Tax is the product-level taxable intent used during order entry review. If a sale must be non-taxable, verify the order tax result before finalization.
• Kit component lines are not sent as separate taxable sales lines. The sellable kit parent carries the taxable sale amount.
• Freight orders can include a freight and shipping tax line when the order has a shipping total.
• Manual line edits should be reviewed before finalization because tax is recalculated from the line values that remain on the order.

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Common Blocks and What to Check

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Use Recent Errors for Recovery

The AvaTax page includes a recent errors section. Use it to find failed commits, failed voids, or return adjustment problems without searching every order manually.

• Start with the most recent error and open the related order or return.
• Confirm the order source before committing anything to AvaTax.
• Confirm the address and customer exemption data before retrying.
• If an order was already committed, expect Arcus to return the existing transaction instead of creating a duplicate.
• After recovery, review the order activity and accounting impact.

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Recommended Admin Checklist

1. Connect AvaTax in Integrations for the correct environment.
2. Confirm Tax Configuration shows the expected company code and environment.
3. Test one known safe address before relying on live order tax.
4. Review Company Setup and locations so ship-from addresses are correct.
5. Review product tax codes for top-selling products, kits, services, and freight-sensitive items.
6. Set exemption codes and tax numbers on customer accounts before taking exempt orders.
7. Run a direct-sale test order and confirm draft tax, final tax, invoice totals, and accounting posting.
8. Run a marketplace test import and confirm passthrough or merchant-collected behavior.
9. Run a return test for a committed order and confirm the tax adjustment appears.

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