Using Avalara for Sales Tax

Overview

Once Avalara is enabled for Sales Tax, Aspire calculates tax automatically during estimate completion and invoice generation. Taxes are based on the property address, the property’s tax status, and the Avalara Tax Codes assigned to your items and services.

If you are looking for information to set up your Tax Entities and Tax Jurisdictions without the Avalara integration, read the Setting Up Sales Tax in Aspire article.

Things to know

• Sales tax is calculated only when Enable Sales Tax Calculation is on.

• If an invoice is voided or reversed, Aspire updates Avalara so records stay accurate.

Requirements

• To calculate Sales Tax during estimating, you must have Edit Estimate added to your user role.

• To calculate Sales Tax during invoicing, you must have Create Invoice added to your user role.

How Tax is Calculated

When Aspire sends a transaction to Avalara, the following information is included:

• Origin Address – The branch address where the company is located

• Destination Address – The property/job site address where the work is performed

• Line Items – Each service or product with its amount and Avalara Tax Code

• Customer Code – Identifies the customer in Avalara

• Entity Use Code – Determines if exemptions apply

• Invoice Date – Used to look up the correct tax rate for that date

Avalara uses this information to determine the applicable tax jurisdictions (state, county, city, special districts), look up the current tax rates, apply any exemptions, and return the calculated tax amount for each line item.

Steps

Calculate Sales Tax when completing an estimate

This is a seamless experience when using the Avalara integration, and you’d estimate just like for all other opportunities in Aspire.

To learn more about the Estimating workflow, read our Creating an Estimate article.

1. Open the estimate to complete from the Opportunities module.

2. Confirm the estimate details and property address.

3. Make any needed updates to estimated items or services.

4. Open the Action menu, then select Complete Estimate. Aspire performs an Avalara tax calculation and displays the result under Estimated Taxes.

Note:

The Estimate Complete button is what triggers the tax calculation. Until that button is clicked, no taxes are computed.

Calculate Sales Tax when generating invoices through the Invoicing Assistant

This is a seamless experience when using the Avalara integration, and you’d invoice just like for all other invoices in Aspire. To learn more about Invoicing, read our Using an Invoice Batch article.

Use these steps when you generate invoices through the Invoicing Assistant or processing batches. 

1. Go to Invoicing and open the Invoicing Assistant or the batch you want to process.

2. Review each invoice to confirm the property address is complete. Avalara requires either a postal code, or a street address, city, and state.

3. Select the invoices you want to process, then select Generate invoice or Complete batch.

4. Aspire sends each invoice to Avalara for tax calculation.

5. When calculations succeed, Aspire updates each invoice with the calculated Sales Tax total. The updated invoice total (invoice + tax) displays in the batch and on the invoice. For a full breakdown (extended price, sales tax, and line totals, and total tax), open the invoice details screen.

6. Review the totals and select Save to complete the invoices.

Note:

After you complete a batch, your transaction is marked a committed and ready for tax filing via the Avalara integration.

Calculate Sales Tax when using a Fixed Price Open Billing invoice type

Your Fixed Price Open Billing invoices operate the same when the Avalara integration is active. To learn more, read our article on Fixed Price Open Billing invoice types.

1. Open an invoice in Open Billing.

2. Add invoice lines and confirm the property address is complete.

3. Select Save to add the invoice to the batch. If Enable sales tax calculation is on, Aspire sends a tax calculation request to Avalara.

4. Sales tax is calculated at the line-item level based on each item’s Avalara Tax Code.

   • For partial invoices (for example, invoicing half of a service), the invoiced portion is taxed using the item’s assigned tax code.

5. The updated invoice total (invoice + sales tax) displays on the batch page.

Behavior notes for specific scenarios

Contract change orders

When invoicing contract change orders, Aspire recalculates Sales Tax using Avalara based on change order amounts. Learn more about creating a change order for your work orders or changes to contracts to get more details.

• Tax applies only to the modified or newly added line items included in the change order.

• Any updates to pricing, quantities, or items trigger a recalculation when the invoice is saved.

Note:

Taxes are only recalculated when you select Win Contract Change, or for work orders, when you select Estimate Complete.

Miscellaneous invoices

When creating a miscellaneous invoice, legacy tax fields are hidden. A helper message displays: Sales Tax will be calculated after clicking Save. After you select Save, Aspire sends a tax calculation request to Avalara and redirects you to the batch page with the updated total.

Credit memos

For new credit memos, Sales Tax displays as TBD until you select Save. After saving, Aspire calculates Sales Tax and updates the credit memo. Credit memos created from the invoice Action menu are also sent to Avalara so both systems stay aligned for reporting.

Important:

Aspire cannot currently void a Credit Memo transaction in Avalara. If a Credit Memo is deleted in Aspire, the void call to Avalara will not be made. This will be addressed in a future enhancement. If a Credit Memo needs to be voided, you should log in to the Avalara portal and void the transaction manually.

Voiding invoices

When you delete an invoice in Aspire, Aspire sends a request to Avalara to void the corresponding transaction.

• If Avalara accepts the request, Aspire deletes the invoice and Avalara marks the transaction as Void.

• If Avalara rejects the request, Aspire displays an error message and the invoice is not deleted.

• If the transaction is locked in Avalara (included in a filed tax return), you must contact Avalara Support to unlock it before it can be voided in Aspire.

Recalculating tax when editing an invoice

• If you modify an existing invoice after Avalara tax has been applied, Aspire automatically prevents native tax from overriding your Avalara data.

• When you edit the Extended Price or add a new line item, the Sales Tax field temporarily changes to TBD.

• Select Save to trigger a recalculation. Aspire sends the updated transaction to Avalara and updates the invoice with the correct tax total.

Managing your invoices created before enabling Avalara

The Avalara integration does not retroactively process invoices created before Sales Tax Calculation was enabled.

If you attempt to batch a legacy invoice after enabling Avalara, the batch may fail because the invoice was not created using Avalara tax logic.

To process legacy invoices:

1. Turn off Enable Sales Tax Calculation.

2. Complete the batch.

3. Turn the setting back on.

Important:

Clear all pending invoice batches before enabling Avalara for the first time to prevent processing conflicts.

Using Avalara with your Retainage invoices

When invoicing an opportunity that includes retainage, Avalara calculates Sales Tax based only on the amount being invoiced. Tax is not calculated on the retained portion until it is invoiced. 

For example, if you invoice 50% of a $10,000 service, Avalara calculates tax only on the $5,000 being billed.

To learn more about retainage in Aspire, read the Retainage Invoicing article.