AvaTax for AP allows businesses to manage consumer use tax compliance and provides the ability to integrate into accounts payable systems for use tax calculation and management.

What is consumer use tax?

Consumer use tax, or use tax for short, refers to tax paid by purchasers based on their use, storage, or consumption of material or services. It’s similar to sales tax, which sellers collect and pay. However, with use tax, the responsibility to report and pay the tax lies with the buyer. Use tax is most commonly collected when a buyer who lives in a state with sales tax purchases an item from a seller whose physical location is in a state that doesn't charge sales tax. Other scenarios that trigger use tax include:

Vendor errors or noncollecting vendors

Out-of-state purchases

Change to original intent of use

Procurement or employee purchases

Software as a service

Central purchasing

Inventory movements

Use tax compliance is a must-have requirement on every relevant purchase transaction.

How does AvaTax for AP help with use tax?

AvaTax for AP provides a use tax automation platform that give businesses the ability to quickly and to more accurately manage use tax compliance.

Using transaction information from your accounts payable or procurement system, AvaTax for AP identifies your under/over-collected use tax and calculates tax to minimize liability and overpayments. Features include:

Identifying, calculating, and correcting overcharged and undercharged seller use tax, catching vendor errors before they become your liability

Centralized within AvaTax for real-time calculations with integrations and with batch imports

A single location for viewing, acting, and reporting on purchase transactions uploaded across multiple procurement systems

Works with other Avalara applications, including Vendor Exemptions, Avalara Managed Returns, and Reporting

Understanding AvaTax for AP