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Fusebill offers several levels of taxation to fit your needs:
- Basic Taxation: Provides worldwide support for state and federal sales taxation
- Advanced Taxation: Provides support for address-based sales tax in the US
- Avalara Direct Taxation: Supports the configuration of product-specific tax rules based on geography, as well as support for European VAT.
How do I know which tax solution I need?
- If you are in North America and only need to tax at the state/provincial and federal level, basic taxation is included in the base Fusebill platform. Contact Support to enable taxation in your Fusebill environment.
- If you are in the US and need to charge sales tax at the zip code level, you will need Fusebill's Advanced Taxation feature. Please contact your sales representative for more details and pricing.
- If you need the ability to charge taxes by product type in addition to geography or you are subject to European VAT taxation rules, you will need to obtain your own Avalara account as well as subscribe to Fusebill's Avalara Direct Taxation feature. Please visit avalara.com to sign up for your Avalara account and then contact your sales representative to enable this feature in your environment.
Do I have Taxes Configured on Fusebill?
Tax configuration is currently handled by Support and is normally set up during the onboarding process.
To determine if you are configured for Taxation, go to Taxes via the Settings tab. When you click on the Taxes option, you will see a message that tells you whether or not taxes are enabled.
If no taxes are enabled, you will see the following screen:
Tax Exemption by Product
The ability to tax or not tax a product is controlled by the Tax Exempt option at the Product level. If a product is configured to be Tax Exempt, this product will not be taxed even if you have taxes configured on Fusebill.
You can use Fusebill's basic taxation if:
- You reside in Canada or the United States and only need tax calculations at the provincial/state, and federal level.
- You reside outside of Canada or the US and are not subject to European VAT taxation rules.
- Canada - Combination of Provincial & Federal taxes charged that are configured based on your business main office location.
- Australia - Set up Flat 10% Sales Tax at the Country level.
Configuring Basic Taxation
- Taxes can be added, modified or removed at any time.
- The additions, modifications or removal will only affect transactions going forward.
- The changes will not back populate.
When activated, you will see a tax grid as shown below. A message will be displayed if there are no active rules (this is the default when taxation is first activated).
To create a new rule, click Create Tax Rule. You will be prompted with a modal dialog as follows:
- Choose a Country from the first dropdown list.
- Depending on the country chosen (for example, Canada or the United States, among others), you may also be prompted for a Province / State. In this case, you can choose a specific province or state, or choose "All" to indicate that the tax you are configuring applies to all provinces or states within the chosen country. An example of this would be Canadian GST at 7%.
- Next, enter a Tax Display Name. This is the text that will appear on your customers' invoices if they are subject to this tax. For example, you might write "ON HST" for Ontario's Harmonized Sales Tax or "NY State Tax" for New York State tax.
- (Optional) Enter a Tax Registration # that can be used to report taxes that must be remitted to the appropriate government. This is used in Fusebill's tax reports.
- Enter the Percentage amount for the tax, up to 4 decimals of precision. (Do not enter the % sign, it will be appended for you.)
- All of these fields will be combined to generate a Unique Tax Code that can be used in reporting. You can modify this code if you wish, but it is recommended that you use the Fusebill-generated default. It is not used in any correspondence to your customers and it must be unique across your Fusebill environment.
- You can choose a Start Date from today onwards. This is the date on which the tax rule becomes effective. You cannot retroactively apply taxes.
- If you choose today, then the tax rule becomes effective immediately and will be used on the next posted invoice for which the rule is applicable.
- If you choose a later date, then the tax rule is in a "scheduled" state and will be activated at midnight on the date specified, in your account's local time zone (as specified in Timezone Defaults).
- You can also optionally choose an End Date if you happen to know that this tax rule is only in effect for a certain period of time. Normally you would use the default ("No End Date") since you will usually not know when the tax rate will change.
Click Apply to apply to create the new rule and return to the grid, or click Cancel to return without saving any changes.
The Life Cycle of a Tax Rule
- Scheduled = the tax rule has been created but will not be applied until its date of activation (at midnight in your account's local time zone).
- Active = the tax rule is currently active and will be applied to all newly posted invoices for which the rule is applicable.
- Expired = you have specified an end date on a tax rule and that end date has now passed. The tax rule shows up in the Historic tab on the grid.
- Retired = you have manually retired a tax rule by clicking the Retire button on the grid. This tax rule shows up in the Historic tab on the grid.
- Expired and Retired rules cannot be re-activated. You must create new tax rules.
- Customer addresses must be captured and will be validated on each tax call. If the address is invalid, no taxes will be returned and there will be an error in the event log.
- You must identify in advance which jurisdictions you are required to tax and submit this information to Support (email@example.com or Web form). We will then configure your tenant to use the jurisdictions you specify. The sales tax calculations in those jurisdictions are calculated commonly across all accounts and according to the geographical tax rules maintained by Avalara.
You will need the Advanced Taxation feature if you reside in the United States and need to charge sales taxes based on your customer's address and zip code. This feature uses an integrated Avalara AvaTax engine to look up and calculate taxes based on the address information in the customer's record. You do not need your own Avalara account to use this option; however, you must purchase the Fusebill Advanced Taxation module as an add-on to your platform in order to enable this feature.
Some notes on using Advanced Taxation:When you have Advanced Taxation configured, a unique Organization Company Code is assigned to you within the Avalara system. The billing system uses this code to keep track of the tax calls made specifically for your organization.
You will need this option if any of the following apply:
- You reside anywhere in the world and need to calculate taxes based on specific product types (e.g. digital services, freight, etc.). This could be in addition to or instead of other types of sales tax.
- You are subject to European VAT taxation requirements.
Prerequisites of Avalara Direct Integration
The following requirements must be met before you can use the Avalara Direct integration:
- You must have purchased the Avalara Direct add-on module as part of your Fusebill agreement. If you do not have this module, contact Sales (firstname.lastname@example.org) to request pricing. Once your purchase has been completed, you will have access to the Avalara Direct configuration page in Fusebill.
- You must obtain your own Avalara client account directly from Avalara. More information can be found at http://www.avalara.com.
Configuring Avalera Direct Integration
Once you have obtained your Avalara client account credentials, click on the Settings tab and then the Taxes menu. Your screen should look like this:
In this screen, you will enter the following:
- Click the Enabled button to enable Avalara taxation in your Fusebill account. All tax-eligible purchases will now be processed by Avalara.
- Your Avalara Account Number, License Key, and (optional) Organization Code. The data for these fields should be obtained from your Avalara representative.
- Development Mode = On or Off - controls whether you want to record actual taxation transactions in your Avalara account or not. If you are testing in a Fusebill sandbox before go-live, leave Dev Mode to "On". Once you are ready to start recording real tax transactions, in your production Fusebill account, move this button to "Off".
- Customer Address Used - choose whether to use the customer's billing address OR shipping address as the address passed to Avalara for validation on each tax call.
- Commit Taxes - choose whether to have Fusebill commit the tax ledger entries to Avalara whenever an invoice is posted. The default setting is Yes. You may want to disable the commit if you are using another system that also tracks Avalara tax calculations for you.
- Define Organization Address - this address is the one to be used as the originating address for your company in order to determine taxes.
- Click Update to save the changes you've made to this form.
Note: If you choose to use a Customer's shipping address and the customer doesn't have one (and is not set to "use the same address for billing and shipping"), the customer's tax call will fail and taxes will not be charged.
The Search tab allows you to do a quick lookup by one of the several fields in order to find a specific invoice where Avalara taxes were charged.
The most common use of this search would be to search by Avalara ID (aka their "Document ID") to find the invoice which had a specific tax charge on it. However, you can also do a "reverse lookup" by Invoice ID or other fields to find a Fusebill object that was referenced in an Avalara transaction. Fusebill records the Invoice ID in each transaction we submit to Avalara.