# Glossary Source: https://developer.avalara.com/avatax-for-vat/cbk1423081226504/ # Glossary Understand key terms used in this integration guide and AvaTax. Review this glossary to understand the terms used in this integration guide and in AvaTax. A - API client A set of routines, protocols, and tools for building software applications. An API specifies how software components should interact and APIs are used when programming Graphical User Interface (GUI) components. B - blanket exemption A certificate that provides a seller the authority to exempt a buyer's entire transaction from sales tax. It's typically attached to the original invoice at the time of sale, and it contains the company name, effective date, reason code, and purchaser's exemption number. - business identification number In AvaTax, the Business Identification Number (BIN) is assigned to a non-U.S. country. For example, this is a Canadian BN (business number) or a European VAT (value-added tax) number. C - child company A company that inherits its tax profile from a parent company in AvaTax. - collection authorities Jurisdictions where you’ve registered to collect and remit tax. - commit An Avalara term interchangeable with "record," specifically as it applies to recorded or recording documents. - company code In accounting software that works with AvaTax, this represents the code that the software uses to identify itself to AvaTax. - company profile The information people tell us about their business that determines how AvaTax calculates tax (such as where they're registered to collect and pay tax, the products they sell and where they sell them, and whether they have exempt customers). D - DAP Delivered at Place. For customs duty and import tax transactions, this indicates that the seller is responsible for all delivery aspects, including packaging, documentation, export approval, loading charges, and ultimate delivery. The buyer is responsible for unloading. The buyer is also responsible for import clearance and any applicable local taxes or import duties. - DDP Delivered Duty Paid. For customs duty and import tax transactions, this refers to a seller who assumes all responsibility of transporting the goods until they reach an agreed-upon destination. The buyer is responsible for unloading. In these scenarios, the seller is responsible for all applicable taxes and import duties. - document code In AvaTax, the unique identifier number for an invoice, credit memo, or return. - drop shipment A transaction in which the seller of goods passes the customer's order and shipment details to a third-party who then sends the goods to the customer. It's also called drop shipping. E - entity use code A method for categorizing tax-exempt customer transactions. The entity use codes represent exemption reasons based on government laws. - ERP A system that organizations use to track and manage essential operations, such as resources, development, sales and delivery, and finance. ERP systems aid the flow of internal business processes and allow for communication between a business's departments and its internal functions and data. - exempt customer A buyer who is exempt from sales and use tax. - exempt reason The reason a person or business is requesting a tax exemption. This can be based on the product type, business type, or the purpose of the purchase. - exemption certificate A document issued by a controlling taxing entity that certifies a business or individual is exempt from a tax liability. - exemption number A unique identifier for each exemption certificate document. G - geolocation The process of assigning latitude and longitude to a street address. - GST A tax that’s due at various turnover stages of the production and distribution pipeline. Although it’s realized as an individual sales tax, the legal tax liability falls on the supplier of the goods or services. In the EU, this tax is called "value-added tax (VAT)," elsewhere it’s called "goods and services tax (GST)." I - item code A unique identifier for an item (including products, services, and charges). J - Jurisdiction An area that’s subject to its own distinct tax regulations, such as state, city, county, and municipality. L - Location A destination or origin for goods subject to excise tax. There are two types of locations: Terminal and non-terminal. M - marketplace facilitator (MPF) A marketplace facilitator, or MPF, is anyone that provides a forum that lists or advertises taxable tangible personal property for sale by marketplace sellers; directly or indirectly collects receipts from the customer and remits payments to the marketplace seller; and is compensated for such services. - marketplace location A taxonomy facet that designates the geographic area in which an Avalara product is sold or marketed. - merchant of record The party that is billing for the items on a transaction. This merchant's name will appear on your billing statements. N - nexus A connection between a business and a taxing jurisdiction that creates a legal requirement for the business to register and remit taxes within the jurisdiction. In AvaTax, configure a nexus to identify jurisdictions where you're registered to collect and remit tax. O - online marketplace An ecommerce system that manages transactions between multiple sellers and buyers. P - product taxability Indicates whether the products and services you sell are fully taxable, partially taxable, or nontaxable. This varies based on the product or service type, amount, and quantity; the transaction date; and the jurisdiction. Sometimes referred to as taxability. Q - quote-to-cash Describes the end-to-end transaction experience or document lifecycle. This lifecycle begins as a quote and ends with a committed transaction and a payment. S - sales tax A domestic transaction tax in the U.S. on the retail sales of goods and services. - seller use tax A percentage of the purchase price required by a state or other political entity in cases where the seller doesn’t have a physical presence in that entity but has enough economic presence to have a nexus. It ensures that the buyer's home entity receives a tax payment from the transaction. The duty to report and pay the tax lies with the seller. - stock keeping unit (SKU) The lowest level of charge granularity related to a stand-alone product or product add-on that’s unique in its pricing model, billing method, or revenue recognition implications. T - tax code A predefined tax rule that determines the tax rate for a product depending on what it is and where it's sold. - tax rule A custom setting that overrides the way AvaTax calculates tax on transactions. A tax rule may belong to one of 4 types: Taxability, Exempt Entity, Rate Override, or Base Override. - technology partner A business that's signed a formal contract to build a repeatable integration to Avalara's product suite. - transaction The record of an invoice, credit memo, or return. U - UUID Universally unique identifier. V - varying taxability The way products and services are taxed at different rates in different jurisdictions. - VAT A tax that’s due at various turnover stages of the production and distribution pipeline. Although it’s realized as an individual sales tax, the legal tax liability falls on the supplier of the goods or services. In the EU, this tax is called _Value-Added Tax (VAT)_, elsewhere it’s called _Goods and Services Tax (GST)_.