# Tax explanation examples

Source: https://developer.avalara.com/tax-transparency/wxr0410919945236/

# Tax explanation examples

The following examples illustrate how the AI agent explains different tax calculation scenarios using transaction data and AvaTax responses.

Scenario

What the AI agent says

Data source

**Multi jurisdiction**

“Your $1,000 invoice was taxed at $87.50 total across 3 jurisdictions: California state (6.00% = $60.00), Los Angeles County (2.25% = $22.50), and the City of Los Angeles (0.50% = $5.00). This uses destination-based sourcing.”

[GetTransactionById](https://developer.avalara.com/api-reference/avatax/rest/v2/methods/Transactions/GetTransactionById/) with `$include=Details`

**Tax exempt**

“No tax was calculated because ABC Company has a valid resale certificate on file (expires 12/31/2025). The certificate covers all items in this transaction.”

[ListCertificatesForCustomer](https://developer.avalara.com/api-reference/avatax/rest/v2/methods/Customers/ListCertificatesForCustomer/)

**Mixed sourcing**

“This order uses mixed sourcing: Software license at $500 × 8.25% Texas tax = $41.25 (origin-based), Hardware at $300 × 6.35% New York tax = $19.05 (destination-based). Total tax: $60.30.”

[TransactionLineDetailModel.sourcing](https://developer.avalara.com/api-reference/avatax/rest/v2/models/TransactionLineDetailModel/)

**Tax cap applied**

“Florida’s tax cap applies to this $5,000 item. Instead of the full 7% ($350), the maximum tax is $300 as set by Florida law for this item category.”

`nonTaxableType: RateCapRule`