How to Calculate Sales Tax in Microsoft Dynamics NAV

Avalara AvaTax connects easily with Microsoft Dynamics NAV to deliver a robust sales tax automation tool.

If you are a business running Microsoft Dynamics NAV, it's easy to automate your sales tax compliance process using AvaTax. This demo give you a preview of the process.


Hi, I'm Mark Wilhelm, Director of Product Integration here at Avalara. Not only am I a recovering accountant, I was also one of the very early employees here at Avalara. I want to give you a quick tour of AvaTax, but first let me share with you a couple of quick facts. Each and every day our tax decision engine processes millions of sales tax calculations, and when it comes to filing and remitting, our customers rely on Avalara technologies and services to process literally hundreds of thousands of sales tax returns each year. What's more, AvaTax integrates with virtually all the well known ERP and financial applications, as well as e-commerce, point of sale and mobile systems so regardless of the platform or systems that you're running, you can manage all of your sales tax issues and get a complete view of your sales tax liability from one cloud based source, the AvaTax admin console.

Let me explain how easy it is to get started with AvaTax. First you'll get a call from our go live team. They're going to help you set up your admin console and connect to your financial application or ERP system. Next you're going to map your products to AvaTax tax codes. For most of our customers this is a fast process using our built-in tools.

Let me show you the remaining steps right here in the application itself. First we'll start here on the AvaTax admin console. Here on the home tab, this is your AvaTax resource centre, including training and product documentation. We'll move over to the organisation tab. Here on the organisation tab, this is where you'll set up your company or set of companies that you will use AvaTax to do tax calculation. Most importantly we're going to come here to the nexus button and within nexus I will go and select the state or set of states where I wish to collect sales tax. Pressing save, we'll save that within my AvaTax account.

Next I'll go over into the Dynamics NAV application and open up a customer record. Most importantly I'm going to go here to the invoicing tab and go down to the tax area code. Within Dynamics NAV, I no longer have to identify each tax area code where I wish to collect tax including all the jurisdictional records that must be created within NAV, I come here to tax area code and I select one AvaTax tax area code and AvaTax will then take it from there. In addition on the customer card, I have address validation functionality that is delivered by AvaTax. Selecting the control A option will make a call to the AvaTax service, validating the address and returning it to a normalised US postal service preferred format. Address validation is very important because we are going to use this shipping address to identify the exact tax location for this particular transaction. Selecting takes us to the Avatax rates map. This is powered by AvaTax calc and our geolocation tax engine. 8500 East Colfax takes us to a Denver address getting a 7.62% sales tax rate, however you'll see just further on down the street, I'll jump into Aurora, Colorado, where in this section of Aurora I'm getting an 8%, but then moving directly across the street you'll see that I'm still in Aurora but now I'm getting the 8.5% sales tax rate.

Tax jurisdictions do not follow zip five boundaries. The AvaTax geolocation technology takes us to the rooftop level to identify the tax jurisdictions applicable for a tax calculation and returns them accurately each and every time. In addition to taking address information to perform our tax jurisdiction assignment, the AvaTax calc service now provides GPS functionality which will take a lat/long coordinate, identify that place on this map, and then identify the specific tax jurisdictions that are applicable.

Going back into NAV, I'll go back into my customer card, from here l'll go ahead and generate a sales order, I'll tab through and have it pull in the right information. Down at the line level I'll choose the product that my customer wishes to purchase, the quantity that my customer wishes to purchase. At any point in time during this process, whether I release the order, whether I generate the invoice and post it or if I just want to see tax calculated, I'll press the statistics button. It will perform the tax calculation. Here you'll see that I had a $4000 item, $308.80 in tax and a breakdown that it is broken up by Colorado state tax, city tax and special tax jurisdictions. All of this information when an invoice is generated will be captured within the AvaTax service.

For any reporting needs generating a report form Avalara and AvaTax provide the following tax report, identifying exactly where I collected tax including any county, city, or special tax jurisdictions and that is AvaTax for Dynamics NAV in a nutshell.

I should point out that the real power is in how the AvaTax family of products works together. Beyond AvaTax calc, many of our customers love the way that AvaTax certs brings order to the chaos of the exemption certificate management process and many of our customers believe the real relief comes with uploading, filing and remitting to our AvaTax returns product, where you can leave that recurring headache to us. I hope you found this video helpful. There's never been a more complicated time in the world of sales tax compliance. That complication means there's never been a better time for sales tax automation. With AvaTax, you'll never have to worry about sales tax again.