Understanding AvaTax for AP

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, is tax paid by purchasers based on their use, storage, or consumption of material or services. It’s similar to sales tax, which is collected and remitted by sellers. However, with use tax, the duty to report and remit 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 non-collecting 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 AvaTax for AP helps you with use tax

AvaTax for AP is a use tax automation platform that provides businesses with the ability to quickly and 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 vendor use tax, catching vendor errors before they become your liability
Centralized within AvaTax for real-time calculations with integrations as well as with batch imports
A single location for viewing, acting, and reporting on purchase transactions uploaded across multiple procurement systems
Seamlessly works with Avalara applications, including Vendor Exemptions, Returns, and Reporting

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