AvaTax Supplemental Terms
Please note that these Supplemental Terms are being updated on January 1, 2020, and that the updated terms will apply to your Avalara Service upon any renewal, upgrade, or additional service purchase made on or after January 1. You can review the updated terms at www.avalara.com/newavatax-terms.
Effective as of January 1, 2019
These AvaTax Supplemental Terms (“AvaTax Terms”) govern Customer’s use of AvaTax. These AvaTax Terms are in addition to and incorporate by reference the Avalara Terms and Conditions located at https://www.avalara.com/terms (the “Terms”). Any capitalized terms used in these AvaTax Terms and not defined shall have the meaning given in the Terms.
1. TRANSACTION CALCULATIONS
a. Transaction Usage. Fees for usage of AvaTax are based on the number of “Transactions” used in AvaTax by Customer. Avalara will charge a number of Transactions used each day equal to the greater of the results of (i) or (ii) below:
i. The number of Documents recorded; or
ii. The number of API calls to the tax calculation service recorded, divided by 10.
In addition to the Transactions counted under (i) or (ii) above, every 10 API calls to the address validation service, other than API calls that are specifically associated with a tax calculation, will count as one Transaction. The number of Transactions used will be measured on a daily basis. For purposes of calculating Transactions used, fractional Transactions will be rounded up to the next whole number.
b. Document Definition. A “Document” is any record that is entered, uploaded, or otherwise recorded in the AvaTax Service by Customer. Documents include, for example, committed sales invoices, purchase invoices, inventory transfer invoices, return invoices, and committed e-commerce shopping carts. Each such record will count as one Document for purposes of calculating usage of AvaTax, as will each subsequent alteration of the record. All such records will be considered Documents, regardless of the tax result generated by AvaTax, except for records on which no tax is calculated solely because the Customer has configured AvaTax to not calculate tax because the Customer does not have nexus in that jurisdiction. For purposes of calculating Document usage, each Document is assumed to have 35 or fewer invoice lines. If the ratio of invoice lines per Document exceeds 35/1 in any day, the number of Documents counted will be the total number of invoice lines in that day divided by 35.
c. Global Transactions.
i. Cross-border Transactions. If Customer records any Documents or API calls for which the ship-from and ship-to addresses are in different countries, Avalara will count such Documents or API calls as “Cross-border Transactions.” Cross-border Transaction usage is calculated using the methodology set forth in Section 1(a) above, and the specific number of Transactions used for each Cross-border Transaction will be 1.15 Transactions.
ii. Customs Transactions. If Customer records a Cross-border Transaction that includes a pre-classified harmonized tariff code, then Avalara will count the customs duty and import tax calculations performed as a “Customs Transaction.” Customs Transaction usage is calculated using the methodology set forth in Section 1(a) above, and the specific number of Transactions used for each Customs Transaction will be 1.75 Transactions.
iii. Estimated Customs Transactions. If Customer configures AvaTax to provide estimated customs charges based on Customer’s item description, Avalara will count the customs duty and import tax calculations performed as an “Estimated Customs Transaction.” Estimated Customs Transaction usage is calculated using the methodology set forth in Section 1(a), and the specific number of Transactions used for each Estimated Customs Transaction will be 2.0 Transactions. Customer is responsible for any variance between the Estimated Customs Transaction and actual customs charges owed to an applicable government authority.
d. Prior Definitions. The description of Transaction usage in this section applies to Initial Subscription Terms that begin on or after January 1, 2019. For any Subscription Terms that began or renewed before January 1, 2019, the prior usage calculations and the definition of Transactions or Documents set forth in the version of the Terms in effect at the time that the current Subscription Term began will be used to determine usage of AvaTax. Upon renewal of any such Subscription Term after January 1, 2019, the new definition of Transactions will apply.
2. ACCURACY GUARANTEE. Avalara provides a guarantee of the accuracy of sales and use tax calculation results provided by AvaTax (the “Accuracy Guarantee”) under the following terms:
a. If a Customer suffers a negative audit finding that results in financial loss due to an incorrect sales or use tax calculation result returned by AvaTax, Avalara shall pay Customer the lesser of either: (i) the amount of the penalties, interest, and uncollected sales or use taxes that directly result from the incorrect result, or (ii) the amount of the AvaTax Service fees paid during the year preceding the negative audit finding.
b. The following limitations apply to this guarantee:
i. Customer must have properly set up, configured, and maintained its tax profile on the Avalara system and have correctly classified items sold by Customer. To the extent that the incorrect result was caused by Customer’s failure to properly set up, configure, or maintain its tax profile or Customer Data, Avalara will not be responsible for the incorrect result.
ii. Avalara will not be responsible for the incorrect result to the extent that it was caused by the failure of the applicable taxing authority to timely and accurately provide or update correct and current tax rates, boundaries, rules, and classifications.
iii. Customer must provide notice to Avalara no later than the earlier of either (1) 10 days after the taxing authority’s finding of a negative audit assessment, or (2) 45 days after the date that Customer identifies, or the taxing authority initially identifies to Customer, an issue that relates to the incorrect result provided by Avalara. Such notice must be sent to email@example.com.
iv. Customer must provide full and timely assistance to Avalara in confirming the nature and occurrence of the error, including providing Avalara with access to its relevant financial reporting records, transaction logs, reports, and all other relevant information reasonably related to the error.
v. Customer must provide full and timely assistance to Avalara in challenging the taxing authority findings if Avalara determines them to be incorrect. To the extent that an audit assessment involves other issues in addition to the alleged incorrect result from Avalara, Customer, its Representatives, and Avalara will work together to ensure a collaborative response to the audit.
vi. Upon first becoming aware of a potential error related to an incorrect result by Avalara, Customer must take reasonable steps to mitigate its losses, including, but not limited to, changing taxability determinations or calculations for ongoing transactions and rebilling customers for the uncollected tax.
c. For purposes of calculating the amount of the Service fees paid that are eligible for the guarantee payment, the amount will be the fees actually paid by Customer to Avalara for the AvaTax Service, and the time period will be the 365 days preceding the issuance of the negative audit finding (e.g., in the case of a negative finding issued by a taxing authority on March 31, 2019, the period used in the calculation will be from April 1, 2018, to March 31, 2019).
d. In the event that (i) Customer ultimately settles with the taxing authority for less than the full amount claimed by such authority, (ii) the audit implicated other issues in addition to the alleged incorrect result provided by Avalara, and (iii) the settlement did not specifically apportion the settlement amounts between the audit issues, the amount to be paid by Avalara under this guarantee will be the percentage of the settlement amount equal to the percentage of the entire settled claim (as such claim existed at the time of settlement) related to the alleged incorrect result provided by Avalara.
e. Avalara shall make the guarantee payment to Customer within 30 days of the date that all administrative appeals are exhausted. Avalara may also, in its sole discretion, make the payment at an earlier date, in which case, Avalara’s obligations to continue to contest the audit will cease on the date of the payment.
f. The Accuracy Guarantee only applies to sales tax calculation results provided by the AvaTax Service after October 15, 2015. Customer must have a current AvaTax subscription in good standing when the claim is submitted to Avalara to be eligible to receive payment under the Accuracy Guarantee.
3. AVATAX EXEMPTION. Customers who purchase AvaTax may use AvaTax Exemption to track the tax-exempt status of its customers. Fees for usage of AvaTax Exemption are based on the number of AvaTax Exemption Certificates recorded in AvaTax Exemption. The number of AvaTax Exemption Certificates counted for purposes of calculating usage of AvaTax Exemption will be the maximum number of AvaTax Exemption Certificates stored at any point in time during a Subscription Term. If a tax exemption document image is used to satisfy Customer’s compliance obligations in multiple jurisdictions, each of the jurisdictions where the AvaTax Exemption Certificate is used will count as one AvaTax Exemption Certificate (for example, one document image used in five states will count as five AvaTax Exemption Certificates for purposes of calculating usage). The first 25 AvaTax Exemption Certificates that Customer uploads to AvaTax Exemption will not be charged. If Customer wants to store more than 25 AvaTax Exemption Certificates, Customer should contact Customer’s account representative to discuss pricing.