Please note that these updated Supplemental Terms will apply to your Avalara Service upon any renewal, upgrade, or Service purchase made on or after January 1, 2021.
AvaTax Supplemental Terms
Last updated January 1, 2021.
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 Service 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.
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 AvaTax by Customer. Documents include, for example, committed sales invoices, purchase invoices, inventory transfer invoices, return invoices, and committed ecommerce 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 for that day will be the total number of invoice lines in that day divided by 35.
c. Global Transactions.
i. International Tax 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 “International Tax Transactions.” International Tax Transaction usage is calculated using the methodology set forth in Section 1(a) (Transaction Usage) above, and the specific number of Transactions used for each International Tax Transaction will be 1.15 Transactions.
ii. Customs Transactions. If Customer records an International Tax 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 (Transaction Usage), 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) (Transaction Usage) above, 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 charges in the Estimated Customs Transaction and the actual customs charges owed to an applicable government authority.
2. AVATAX DATA STORAGE.
a. Included Storage. AvaTax includes access to stored transaction data (i) for customers who have AvaTax subscriptions but not subscriptions for Avalara Managed Returns for Accountants, Avalara Returns, Avalara Returns for Accountants, or Avalara Returns for Small Business (“Returns Services”), for the current and previous calendar years; and (ii) for customers who have AvaTax subscriptions plus subscriptions to any Returns Services, for the current and previous four calendar years.
b. Extended Storage. Avalara will charge a fee to access older transaction data. Fees for access to older transaction data are based on the number of “Stored Documents” recorded prior to the previous calendar year for AvaTax customers and prior to the previous four calendar years for AvaTax plus Returns Services customers. Avalara will charge a number of Stored Documents equal to the greater of (i) the number of Documents recorded; or (ii) the total number of invoice lines in the Documents recorded divided by 35. Avalara sells Stored Documents in increments of 25,000 (each increment, a “Storage Unit”).
3. 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 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, as specified in the final assessment notice received from the applicable taxing authority after all administrative appeals and abatement options are exhausted, or (ii) the amount of the AvaTax fees paid during the year preceding the negative audit finding (calculated as described in subsection (c) below).
b. The following limitations apply to the Accuracy Guarantee:
i. Customer must have properly set up, configured, and maintained its tax profile and Customer Data 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 alleged incorrect result provided by Avalara. Such notice must be sent to firstname.lastname@example.org.
iv. Customer must provide full and timely assistance to Avalara in confirming the nature and occurrence of the alleged error, including providing Avalara with access to its relevant financial reporting records, transaction logs, reports, and all other relevant information reasonably related to the alleged error.
v. Customer must provide full and timely assistance to Avalara in challenging the taxing authority findings if Avalara, in its sole discretion, 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 AvaTax fees paid that are eligible for the Accuracy Guarantee payment, the amount will be the fees actually paid by Customer to Avalara for AvaTax, 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, 2020, the period used in the calculation will be from April 1, 2019, to March 31, 2020). For clarity, for purposes of this calculation, the fees paid for AvaTax do not include activation fees, any fees for ancillary Professional Services, or any other one-time fees.
d. If the audit implicated other issues in addition to the alleged incorrect result provided by Avalara, the amount to be paid by Avalara under the Accuracy Guarantee will be the percentage of the final assessment amount equal to the percentage of the final assessment related to the alleged incorrect result provided by Avalara.
e. Avalara shall make the Accuracy Guarantee payment to Customer within 30 days after the date that Customer receives the final assessment notice from the applicable taxing authority, after all administrative appeals and abatement options are exhausted. Avalara may also, in its sole discretion, make the payment at an earlier date, in which case, Customer’s obligation to continue to assist Avalara in contesting 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.
4. AVATAX EXEMPTION. Customers who purchase AvaTax may use AvaTax Exemption to manage the tax-exempt status of their 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.
5. AVALARA SHIPPING VERIFICATION. “Avalara Shipping Verification” means the feature of AvaTax for Beverage Alcohol where Avalara checks Customer’s beverage alcohol transactions against a database of shipping rules and restrictions. Avalara Shipping Verification does not aggregate multiple shipments in providing compliance determinations. Avalara has no duty to provide an update if applicable limits change after Avalara provides a determination, including for a future shipping date. Customer may not use determinations for any purpose other than checking its own beverage alcohol shipping compliance.