How to Calculate Sales Tax in Sage 500

Avalara AvaTax connects easily with Sage 500 to deliver a robust sales tax automation tool.

If you are a business running Sage 500, it's easy to automate your sales tax compliance process using AvaTax. This demo give you a preview of the process. Hint: for better resolution watching the screen captures, choose the highest resolution in the pull down menu in YouTube, and choose to watch it in "full screen" mode.


Hi, I'm Mark Wilhelm, Director of Product Integration here at Avalara. I'm a recovering accountant. I'm also one of the very early employees starting back in 2005. I'm here today to talk about Sage sales tax from MAS 500, powered by AvaTax. But first, let me share some facts about the power of AvaTax.

Every day, our tax decision engine processes literally millions of sales tax calculations and when it comes to filing and remitting, our customers rely on Avalara technologies and services to file hundreds of thousands of sales tax returns every year. What's more, AvaTax integrates with virtually all the well know ERP and financial application, as well as POS, e-commerce, and mobile systems. Say you acquire a company that's running a different financial application, no problem. You want your sales force to begin collecting sales tax in the field on a mobile device, no problem. Want to begin selling online, no problem. Your admin console is the place you can monitor all of your disparate systems and manage your sales tax compliance in one place.

Let me explain how fast and easy it is to get started without AvaTax. First, you're going to get a call from our GoLive team. They're going to help you set up you admin console and connect into MAS 500. Next, you're going to map your products to our AvaTax tax codes. For most of our customers, it's a fast and simple process using our tools built into MAS 500. You're going to either map your groups of SKUs or individual SKUs to your tax codes. Let me show you the remaining steps in MAS 500.

Within the AvaTax Admin Console, we'll start at the home tab. The Home Tab is your resource center for everything AvaTax. Going into the organization tab, this is where I've defined the company or set of companies that will use Avatax for tax calculation. I'll next drill into the nexus option. Nexus is where I've define the state or set of states that I wish to collect sales tax in. I'll next directly go into MAS 500, open up my Maintain Customers window, select my customer, I'll first go to the Bill To/Ship To tab and into sales tax. And this is probably the most important element of AvaTax within MAS 500. I no longer have to define sales tax schedules by city, county, or state. All I need to do is select the AvaTax sales tax schedule and AvaTax will automatically calculate sales tax everywhere that I have Nexus.

In addition to sales tax calculation, the AvaTax integration also includes address validation. Any time that I enter a new address or edit an existing address, all I need to do is come over here to the orange A icon, click that. It will validate the address, return it normalized using a U.S. Postal Service preferred format. Clicking save will then update that address and the rest of the information within MAS 500. Address validation is not only important for normalizing the address within the application, however it's used in sales tax calculation, as well. If I come over here to powered by AvaTax, if I were to put in Commerce City, Colorado, for example, and calculate sale tax using merely a five digit zip code, I might return the 8.35% sales tax rate that you see here on the window. However, if you look directly across the street from that address, sales tax changes and the rate now is 4.85%. Using just the zip five or even the zip nine for sales tax purposes would never capture this nuance. AvaTax, using our geospatial technology, will always calculate sales tax accurately and at the address level.

Next, I'll go back into MAS 500, close my customer window, and I'm now going to go into sales order. I'll enter a sales order, I'll select my next sales order number, the customer, I'll identify the product that my customer wishes to purchase. Upon clicking this button by the total, AvaTax will calculate sales tax, applying $2.22 worth of sales tax. I can drill in and see the state and any local taxes that are calculated. Closing that window and my order totals, I can then save that order. And finally, the most powerful element of AvaTax is back on the AvaTax Admin Console, in my reports section. At the end of each month, I can generate sales tax reports that identify exactly where I've collected sales tax and using this report, generate my own manual sales tax returns. Though I must say, it's even easier if you just turn on AvaTax Returns and leave the filing and remitting to us. I hope you found this video helpful. There has never been a more complicated time world of sales tax compliance. That complication means there has never been a better time for sales tax automation. With AvaTax, you'll never have to worry about sales tax again.