Address validation in AvaTax

Valid addresses are a critical component of accurate tax calculation.

You may be thinking, "I have the ZIP Code. Isn’t that enough?" Not really. There are a few reasons why you shouldn't rely on ZIP Codes:

ZIP Codes are too broad for tax determination because the USPS sets the zones for mail delivery.
State and local tax authorities often use other criteria for bounding their tax jurisdictions, such as a special stadium or restaurant tax district.
ZIP Codes can’t correctly handle transactions in states that have mixed sourcing, such as California and Texas. This means that the origin address allocates a portion of the tax and the destination address allocates the other portion.

So, what’s the best way to ensure that your organization has the most accurate addresses?

An address validation API, such as the AvaTax ResolveAddressPost API that validates addresses. This API helps you develop a more robust user experience for your customers. In addition, the API helps your organization calculate more accurate taxes, so you can minimize overcharging or undercharging sales tax.

If you plan to use the AvaTax address validation service, you must meet the requirements in this guide to achieve the Address Validation badge.

Also consider how and where you want to implement this service. You can validate addresses in several places within AvaTax. This includes your company locations, customer addresses, and order entries.

Note

Avalara will charge your customers per 10 address validations, so you may want to consider ways to drive down usage in your integration.