Optional: Set up a hierarchy of subsidiary companies

About this task

Before you begin

When creating your company, AvaTax prompts you to enter the following information. For testing purposes, you can use generic or test information.

Legal company name
- The name your company uses on legal documents.
Taxpayer ID
- Also known as an Employer Identification Number (EIN).
- The IRS creates this number.
- Call the IRS Business and Specialty Tax Line if you don't know your ID or have questions about your company's EIN.
Business ID (BIN)
- If you do business outside the US, you need a Business ID (BIN).
- This number is created by the governments in the countries where your business operates.
Your company's primary address
- The physical address for your company's headquarters or main location.

You can find most of these items in your company's tax returns and tax registration documents.

About this task

Does your platform support holding companies and subsidiary companies that share tax-collection information or file together? If so, make sure AvaTax reflects this relationship by designating child companies during company profile setup.

Company relationships within AvaTax are flexible. Hierarchies in AvaTax allow you to integrate multiple companies even if they’re running on different accounting, ecommerce, and ERP platforms. A child company can inherit the company profile of its parent company or it can have its own unique company profile.

AvaTax assigns every company a company code. AvaTax uses company codes when designating which company profile processes a transaction.

Careful setup and use of company codes is essential for the proper functionality of AvaTax.

Steps

In AvaTax, go to Settings > Manage companies.
Select Add a company, and then select Get started.
Enter your company information.
- If your primary business address is outside the U.S.:
  - Clear the My company's primary business location is in the US checkbox.
  - Select the country where you have your business.
  - Enter the BIN for that country.
Select Organize this company under a parent company.
Start entering the parent company's name in the Parent company field, and select it when it appears.
Usually, the child company shares tax-collection information with the parent company. If your child company doesn't, clear Use tax collection settings of the parent company.
If your child company files returns with the parent company, clear the This is a separate reporting entity checkbox. Leaving it selected means you need to set up returns separately for this child company.
Select Next.
Enter your primary business address, including the street address, city, state, territory or region, and ZIP or postal code. Specify a location where you report tax.
Select Validate.
- If your company is located outside the US, you might not see this option. If that's the case, select Next to skip this step.
Compare the address that you entered against the validated address.
Select Use validated address to accept the changes or select Keep original address to use the address you entered. We recommend using the validated address for the most accurate tax calculations.
Confirm the address on the map or change it as needed.
Select Next. If you used the parent company's company profiles, you're done. Select Activate company. Otherwise, follow the instructions in the Tell us where you collect and pay tax Knowledge Center article to set up tax calculation for your company.

Result

Subsidiary companies are successfully added and visible in the company hierarchy.