Sales Tax Integration ... Avalara Edition

If you’re using the Avalara tax interface that comes with SyteLine®—not just the standard tax setup—this one’s for you.

Let’s be real: sales tax is one of those things that feels like it should be simple. But the second you start selling across multiple states (or even just shipping to them), it gets messy fast.

That’s where Avalara comes in. When you’ve got the Avalara interface turned on in SyteLine®, Avalara becomes the boss of tax. It calculates everything—what’s taxable, where it’s taxable, and how much to charge. SyteLine® just passes the data along.

Wait, Who’s in Charge?

When you’ve interfaced Avalara, SyteLine® is not in charge of tax. Avalara is. And SyteLine® knows it.

Here’s how:

• Assign the tax code EXTRNL to your customers and transactions.

• That tells SyteLine®, “Hey, don’t even try to calculate this—send it to Avalara.”

• Avalara looks at the customer, the ship-to address, the items on the order, and says, “Cool, here’s how this should be taxed.”

And it’s smart. You can assign Avalara tax codes to your SKUs so it knows what kind of thing you’re selling—personal property, services, freight, etc.—and it’ll calculate tax accordingly based on jurisdiction.

Real-World Example

Let’s say your customer’s headquarters is in Texas (which has sales tax), but they’ve got ship-to locations in Montana (which doesn’t), Kansas, Alabama, and Florida.

Avalara will take all that into account. Even freight gets evaluated differently in different places. Some states tax it. Some don’t. Some have dollar thresholds. Some have weird exemptions. Avalara knows the rules—and if your setup is right, it applies them automatically.

That Tax Calculator is Gold

Here’s a pro tip most people miss: Avalara has a built-in Tax Calculator tool. It’s awesome for previewing how tax will calculate before you send an invoice—or answering that dreaded “why is the tax so high?” email from a customer.

You just:

• Enter the ship-to info

• Plug in the item or Avalara tax code

• Hit calculate

It shows you every jurisdiction involved, every rate, and the final tax amount. Super helpful if you're testing new setups or validating that your items are mapped correctly.

What About Exempt Customers?

Here’s the thing—SyteLine® doesn’t control tax exemptions. Avalara does.

If a customer has an exemption certificate, you need to put it in Avalara and tie it to the right state or jurisdiction. That’s what tells Avalara to treat the order as non-taxable—or apply a reduced rate, like California’s partial manufacturing exemption.

Let Avalara do the work. That’s the whole point.

Uh Oh, We Charged Tax By Mistake

Happens more than you’d think. A customer gets their invoice, sees tax, and says, “Hey, we’re exempt in that state!”

If they’ve since provided a valid exemption certificate, you can fix it right in SyteLine® using one of the most awkwardly named forms ever: Tax Interface Invoice Tax Credit.

Here’s what it does:

1. You enter the invoice number.

2. SyteLine® checks first to make sure the sales tax hasn't already been credited.

3. Then it checks Avalara to see if the transaction can be reversed.

4. If it can, SyteLine® processes the tax credit in both systems.

5. Avalara creates two new entries: one to reverse the original transaction (_TC), and one for the corrected exempt version (_EI).

Meanwhile, SyteLine® creates a credit memo for the tax amount, posts it to the right GL account, and applies it to the original invoice. No extra steps. No manual journal entries. Just clean and done.

Need Help Navigating Sales Tax?

I always say this: I’m not a tax expert—I Google it just like the rest of you.
But when it comes to reliable sources, Avalara is my go-to for anything sales tax related.

Here are two of my favorite (and totally free) resources:

• 👉 Avalara Tax Codes – a searchable library that helps you classify your products and services correctly

• 👉 Avalara 2025 U.S. Sales Tax Rates by State – a handy guide to see the latest rates and taxability rules for each jurisdiction.

They’re great tools to bookmark—especially when a customer questions a tax amount or you’re reviewing your item setup.

Wrap-Up

If you’re using Avalara with SyteLine®, the most important thing to remember is this:

SyteLine® sends the data. Avalara makes the tax call.

Your job is to make sure:

• EXTRNL is your default tax code

• Your SKUs have the right Avalara item tax codes

• Exemptions are stored in Avalara, not SyteLine®

• You use the Tax Credit form when needed—don’t wing it

Whether you're fine-tuning your setup or cleaning up tax credits after the fact, understanding how SyteLine® and Avalara work together can save a lot of time (and a few headaches).

This entry is posted. See you in the next journal.
Stacey