Charge US sales tax with Avalara AvaTax or TaxJar

US sales tax depends on where the buyer is, down to the state and ZIP code, and the rates change often. A tax service such as Avalara AvaTax or TaxJar keeps track of them. With this add-on, your site asks your AvaTax or TaxJar account for the exact tax of each cart, adds it at checkout, and records the sale in your account so it is ready when you file.

It works with the shopping cart paid in one payment, so it needs the Marketplace plan. Only admins can open its page.

What it does, and what it doesn’t

• Who is taxed: buyers whose delivery address is in one of your Buyer countries (the United States unless you change it). Buyers elsewhere keep your sellers’ VAT exactly as before (see VAT and taxes).
• What is taxed: the items and their shipping in a cart paid in one payment.
• What isn’t taxed: Buy now (a single listing paid on its own), other payment methods and paid bookings. Buyers who pay that way pay no sales tax, so make sure that fits your tax obligations.
• Who keeps the tax: you. The sales are recorded in your account, so the tax is yours to file and pay. It is added after your commission and service fee, is never counted in them, and isn’t paid out to the seller. If a seller would normally add their own VAT, the sales tax replaces it and that VAT comes off the seller’s payout.
• No tax, no payment: a buyer in your countries can only pay once every item in their cart is taxed. If the tax can’t be worked out, the checkout is refused with the reason (see What buyers see). It never charges them without the tax.

Whether you must collect sales tax, and in which states, is a question for your accountant. The add-on calculates and records the tax; it doesn’t decide where you are registered.

What you need

• An Avalara AvaTax or TaxJar account, set up with the states where you collect tax. The provider bills you for it; Yclas doesn’t charge for the add-on.
• Your keys: for AvaTax, the account ID, a license key and your company code; for TaxJar, an API token. Both providers have a sandbox (test) account, and its keys only work with the sandbox switched on.
• The shopping cart switched on, with buyers paying the whole cart in one payment.
• Sellers’ ship-from addresses: each seller’s Shipping origin, or your own address on the setup page.

Set it up

1. In your admin panel, go to Add-ons, open the Payments tab and click Sales tax (AvaTax, TaxJar).
2. Choose your Provider: Avalara AvaTax or TaxJar.
3. Fill in that provider’s keys (see the table below). To try it on a test account first, tick Use the sandbox (test account).
4. Under What is taxed, check Buyer countries and, if you need one, the Product tax code (optional).
5. Fill in the Ship-from address, for sellers who haven’t set their own.
6. Click Save and test connection. The page says The connection works, or why the test failed.

Secret keys are never shown again after you save them. Leave the field empty to keep the saved one, or tick Remove the saved key (or Remove the saved token) to delete it. To switch sales tax off, choose None (off) as the provider and click Save.

Setting	What it does
Provider	Avalara AvaTax, TaxJar, or None (off).
Use the sandbox (test account)	Uses the provider’s test environment. Untick it when you change to your live keys.
Account ID, License key (AvaTax)	In AvaTax, under Settings > License and API keys.
Company code (AvaTax)	The AvaTax company the sales are recorded in, on Settings > Manage companies. Empty uses DEFAULT.
API token (TaxJar)	In TaxJar, under Account > TaxJar API.
Buyer countries	Two-letter country codes, separated by commas, such as US or US, CA. Only buyers delivering to these countries are taxed.
Product tax code (optional)	The provider’s code for what your sellers sell. Empty means general goods.
Ship-from address	Street, City, State, Postcode and Country. Used for sellers who haven’t set their own shipping origin.

If the page shows Sales tax is calculated when buyers pay for their whole cart in one payment, the cart isn’t set up for one payment yet: switch on the shopping cart first.

Where tax is worked out from

The tax depends on two addresses:

• The buyer’s delivery address. In the cart, buyers in your countries see Your delivery address is needed to calculate the sales tax. and fill in Street, Postcode, City, State or province and Country. With live shipping rates on, the address they give for shipping rates is used instead.
• The seller’s ship-from address. It comes from the seller’s Shipping origin page, the same one live shipping rates use. Sellers who haven’t filled it in use your Ship-from address on the setup page.

The taxed address is also the address the seller sees for the order in My sales.

What buyers see

At checkout, a buyer in your countries sees a Sales tax line, and the invoice shows the exact tax as Sales tax.

When the tax can’t be worked out, the cart says why and the buyer can’t pay yet:

What happened	What the buyer is told
The provider didn’t answer in time, or gave an incomplete answer	We couldn’t calculate the sales tax for your order. Please try again in a moment.
The provider rejected the address	They’re asked to check their address in the cart, especially the ZIP code and the state.
A seller has no ship-from address, and there’s none on the setup page	That item can’t be taxed: they’re asked to remove it from the cart or contact you.
The cart has items from more than 10 sellers	They’re asked to remove some items and buy them in a separate payment.
The provider refused your keys or account	Sales tax can’t be calculated right now, so your cart can’t be paid yet. You’re told too (see below).

Buyers outside your Buyer countries are never refused because of sales tax.

When your account stops working

If AvaTax or TaxJar refuses your keys or your account (a key expired or was revoked, or the account was suspended), buyers in your countries can’t pay for their cart until it is fixed. Your site tells you in three places:

• the setup page shows a red notice, Your sales tax provider refused your keys or account, with the date and the provider’s message;
• the Sales tax (AvaTax, TaxJar) card in Add-ons says Not working in red;
• an email, Sales tax: your tax account stopped working, goes to your Sender email from Email settings, at most once a day.

Fix the keys or the account with the provider, then save the settings again (Save and test connection is the quickest check). The notice also clears by itself as soon as the provider accepts a call again.

What is recorded in your tax account

When an order is paid, your site records it in your account: as a committed transaction in AvaTax, or as an order transaction in TaxJar, with the tax charged at checkout. A refunded order is refunded there the same way. An order refunded before it was recorded is simply never sent.

Latest orders on the setup page lists the recent orders with their Sales tax, the Transaction reference in your account and a Status:

Status	What it means
Not paid	The tax was worked out at checkout, but the order isn’t paid (yet).
Waiting to be recorded	Paid: it is sent to your account shortly.
Recorded	It is in your AvaTax or TaxJar account.
Refund waiting to be recorded	The order was refunded: the refund is sent shortly.
Refund recorded	The refund is in your account.
Refunded before it was recorded	Nothing was sent, and nothing needs to be.
Could not be recorded	The provider refused it 6 times. The reason is shown in red: record it in your account yourself.

Good to know

• Refunds go to your tax account for whole order lines. A partial refund isn’t sent to AvaTax or TaxJar.
• With prices shown in the buyer’s currency, the tax is worked out in the listing’s currency.
• Your sellers’ VAT settings still apply to buyers outside your Buyer countries.

Related guides

• Shopping cart — the one-payment checkout sales tax applies to.
• VAT and taxes — VAT on what members pay you, and sellers’ own VAT.
• Live shipping rates with Shippo — the delivery address and sellers’ shipping origin.
• Commission and service fees — what you keep from each sale.
• QuickBooks and Xero — send your sales to your accounting software.