Please note these Supplemental Terms are being updated on January 1, 2022, and the updated terms will apply to your Avalara Service upon any renewal, upgrade, or service purchase made on or after January 1. You can review the updated terms at https://www.avalara.com/newcommunications.
Avalara for Communications Supplemental Terms
Last updated October 1, 2020.
These Avalara for Communications Supplemental Terms (“AFC Terms”) govern Customer’s use of one or both of Avalara’s transaction tax calculation and return services for telecommunications products and services, including AvaTax for Communications and Avalara Returns for Communications (“AFC Services”). These AFC Terms are in addition to, and incorporate by reference, the Avalara Service Terms and Conditions available at https://www.avalara.com/terms (the “Terms”). Any capitalized terms used in these AFC Terms and not defined have the meanings given in the Terms.
a. “Avalara Returns for Communications” means the Service that uses the information from the tax calculation service used by Customer to produce and remit federal, state, and local AFC Returns.
b. “AvaTax for Communications” means the Service for transaction taxes, surcharges, and fees calculated on telecommunications products and services.
c. “AFC Return” means a standard tax compliance return or remittance prepared for one filing period for one Filing Entity.
d. “Billed Charges” means the gross sum of fees and charges included in a Transaction.
e. “Taxes Calculated” means the total of all taxes, surcharges, and fees in the compliance report (or a successor report that Avalara may designate by notifying Customer in writing) generated from Customer’s usage of AvaTax for Communications (the “Compliance Report”). If no Compliance Report is generated, all taxes, surcharges, and fees calculated by the Service will be considered Taxes Calculated.
f. “Transaction” means each transaction tax, surcharge, or fee calculation for a line item on an invoice, sales order, or other order document submitted electronically by Customer to AvaTax for Communications, and, if applicable, each API call to Avalara requesting location information. A Transaction may be referred to on a Sales Order by the letter “T” when preceded by an amount.
2. Services Term. Except as otherwise provided in the Order Document or otherwise agreed in writing by the Parties, the Initial Subscription Term will extend for one year following the Fee Commencement Date, unless earlier terminated in accordance with the Terms. The “Fee Commencement Date” will be determined as follows:
a. if the Effective Date is on or before the 15th day of the month, the Fee Commencement Date will be the first day of that month; or
b. if the Effective Date is on or after the 16th day of the month, the Fee Commencement Date will be the first day of the following month.
3. AvaTax for Communications Service Usage Calculations. The description of AvaTax for Communications usage in this section applies to Sales Orders effective on or after October 1, 2020.
a. Avalara will calculate Customer’s ratio of Billed Charges for uncommitted Transactions to Billed Charges for committed Transactions on a monthly basis (the “Ratio”) and Customer’s fees for use of the Service will be based on the following:
(i) if the Ratio is less than 10:1, Customer’s fees for use of the Service will be calculated based on Billed Charges for committed Transactions;
(ii) if the Ratio is greater than or equal to 10:1 and less than 20:1, then Customer’s fees for use of the Service will be calculated as the Billed Charges for committed Transactions plus the Billed Charges for uncommitted Transactions in excess of 10:1 divided by 10 (for example, if Billed Charges for uncommitted Transactions are $13,000 and Billed Charges for committed Transactions are $1,000, then Customer’s gross revenue is calculated as $1,000 + ($13,000-($1,000*10))/10 = $1,300); or
(iii) if the Ratio is greater than or equal to 20:1, then Customer’s fees for use of the Service will be calculated as the Billed Charges for uncommitted Transactions.
b. Each Transaction will count toward the Billed Charges for purposes of calculating usage of AvaTax for Communications, including subsequent alterations and recalculations of Transactions, regardless of the tax result generated by the Service.
c. If Customer’s Billed Charges exceed Customer’s subscription tier during a Subscription Term, Customer shall pay overages calculated as a percentage of Customer’s Billed Charges that exceed Customer’s subscription tier.
4. Avalara Returns for Communications Service.
a. Account Setup. Customer shall provide Avalara with all information requested by Avalara to establish and set up Customer’s Account for Avalara Returns for Communications and produce the AFC Returns (the “Filing Information”). Filing Information includes: (i) a list of taxing jurisdictions for Customer’s AFC Return preparation (the “Filing Jurisdictions”); (ii) the filing frequency for AFC Returns in each of the Filing Jurisdictions (the “Filing Calendar”); (iii) the entities (e.g., Customer or its Affiliate) for which Avalara will be preparing AFC Returns (each, a “Filing Entity”) and which Filing Jurisdictions apply to each Filing Entity; (iv) tax registration numbers and login information for each Filing Entity in each Filing Jurisdiction sufficient to allow Avalara to identify and access each Filing Entity’s account in that Filing Jurisdiction (the “Account Information”); (v) copies of each Filing Entity’s previous filings in the Filing Jurisdictions, as requested by Avalara; (vi) completed power(s) of attorney for each Filing Entity, including the power of attorney described in Section 4(e)(i) (Funding) below, and (vii) any other information necessary to properly configure Customer’s Account and produce the AFC Returns. Customer is solely responsible for timely providing and maintaining accurate, complete, and current Filing Information, and Avalara has no obligation to audit, verify, correct, or maintain any Filing Information.
b. Changes to Filing Information. Customer shall review its Filing Information periodically and shall promptly communicate any changes to Avalara. Avalara shall implement changes to the Filing Information no later than two months after Customer has submitted those changes to Avalara. If Customer requests to add a Filing Jurisdiction that is not supported by Avalara, Avalara will not implement a change to add filings in that Filing Jurisdiction.
c. Tax Data.
i. Customer is solely responsible for the accuracy and completeness of all the data necessary to properly complete AFC Returns (the “Tax Data”) and all Filing Information. Avalara does not audit, validate, or verify Tax Data. Customer shall provide the Tax Data in the format specified by Avalara or in a format agreed to by the parties in writing.
ii. If Customer uses AvaTax for Communications, Avalara will pull Customer’s Tax Data directly from AvaTax for Communications.
iii. If Customer uses a tax calculation system other than AvaTax for Communications:
1. Each month, Customer shall provide its Tax Data to Avalara in an electronic file supported by Avalara by the third calendar day of the month in which the AFC Return is due.
2. If Customer fails to provide the Tax Data by the third calendar day, Avalara may, in Avalara’s sole discretion, charge Customer an additional fee to expedite Customer’s AFC Return, file the AFC Return late, or decline to file Customer’s AFC Return in that month.
3. Avalara, in its sole discretion, may require Data Transformation Services. “Data Transformation Services” are Services where Avalara converts Customer’s transactional data to a form that meets Avalara’s minimum transactional data requirements. Data Transformation Services are performed at Customer’s direction and expense, pursuant to an Order Document, and the resulting data set is part of Customer’s Tax Data.
d. Tax Liability. If Customer uses AvaTax for Communications, by the end of the second calendar day of each month Avalara shall provide Customer, based on Customer’s Tax Data and Filing Information, an estimate of Customer’s tax liabilities incurred in the just-ended filing period that will be contained in the AFC Returns due to each Filing Jurisdiction between the 16th of that month and the 15th of the following month (the “Estimated Taxes”). Customer is solely responsible for the accuracy and completeness of Customer’s Estimated Taxes and may modify its Estimated Taxes up to the end of the fourth calendar day of the month for AFC Returns to be filed between the 16th of that month and the 15th of the following month (“Estimated Taxes Approval Deadline”). After the Estimated Taxes Approval Deadline, Customer’s Estimated Taxes are locked and deemed approved by Customer, Customer may not submit additional Tax Data for that period, and any AFC Returns and tax amounts due (the “Taxes”) will be submitted based on the Estimated Taxes and Filing Information.
e. Funding. If the applicable AFC Return is due between the 1st and 15th of the month, then Customer shall make sufficient funds available to pay the Taxes (“Tax Funds”) by or on the 20th of the prior month. If the applicable AFC Return is due between the 16th and the end of the month, then Customer shall make the Tax Funds available by or on the 5th of that month. Avalara will draw the Tax Funds from the Avalara Funding Account and/or the Customer Bank Account (as applicable) after the date the Customer is obligated to make Tax Funds available pursuant to this section (e). Avalara may make more than one draw in a month. Avalara will not provide any Tax Funds. Notwithstanding any other provision of this Agreement, Customer shall defend, indemnify, and hold Avalara, its Affiliates, and their respective officers, directors, employees, and representatives harmless from any Losses arising out of or related to Customer’s failure to timely and adequately provide available Tax Funds for Taxes due. For timely remittance of the Tax Funds to the applicable Filing Jurisdiction, Customer must do the following:
i. Avalara Funding Account. With Avalara’s approval, Customer may use Avalara’s account (the “Avalara Funding Account”) for tax remittance. In order to use the Avalara Funding Account, Customer must provide a bank account for Avalara to draw the Tax Funds and any applicable Avalara Returns for Communications fees by ACH or wire transfer, at Avalara’s sole discretion (the “Customer Bank Account”). Any interest earned on the Tax Funds accrues for the benefit and is the sole property of Avalara. Customer shall execute a limited power of attorney in the form requested by Avalara by the 25th day of the month prior to the first month in which the Taxes are to be paid. For example, for Taxes and AFC Returns for December to be filed in January, the limited power of attorney is due by December 25th. Customer shall ensure the Customer Bank Account is adequately funded to pay Tax Funds and, if applicable, Customer’s Avalara Returns for Communications fees and Expenses, by the deadlines provided by Avalara. If Customer fails to timely and adequately fund the Customer Bank Account, Avalara may require Customer to remit payment for the Taxes directly to the applicable Filing Jurisdiction, and Customer will be responsible for payment of any interest or penalties that may accrue. If the ACH payment Avalara draws from the Customer Bank Account is cancelled or returned other than by Avalara, that will be considered a failure to timely fund the Customer Bank Account. Avalara may suspend or terminate Customer’s subscription to Avalara Returns for Communications immediately upon notice if Customer fails to timely and sufficiently fund the Customer Bank Account, as applicable. Upon termination of Customer’s subscription to Avalara Returns for Communications with no balance due, Avalara shall cease to use any power or authority granted by a power of attorney signed by Customer.
ii. Bank Authorization. Customer authorizes Avalara to (1) withdraw the Tax Funds from Customer Bank Account to pay the Taxes in accordance with the Filing Calendar, including making any required prepayments; and (2) if applicable, withdraw Customer’s Avalara Returns for Communications fees and Expenses.
f. Avalara Responsibilities. For those Filing Jurisdictions and for those Filing Entities for which Avalara and Customer have agreed Avalara will file, if Customer timely provides Avalara all Filing Information and Tax Data, Avalara will (i) remit the applicable AFC Returns; (ii) if applicable, remit Taxes; (iii) correspond with the Filing Jurisdictions; and (iv) provide to Customer a monthly tax filing report. Avalara is not responsible for any of Customer’s Taxes under any circumstances. During the Subscription Term, if Customer (or its Affiliate, if applicable) receives any notice from a Filing Jurisdiction, Customer shall immediately, and no later than 10 business days after the date of such notice, electronically deliver such notice to Avalara. Such notice must be submitted by following the instructions in the Documentation. During the Subscription Term, Avalara will respond to notices for AFC Returns and Taxes remitted by Avalara. In the case of notices received by Avalara more than 10 business days after the date of the notice, Avalara reserves the right to delay response or not to respond or, if Customer asks Avalara to expedite the notice response and Avalara agrees, to charge an additional fee. Avalara shall have no responsibility for any notice management upon expiration or termination of the Subscription Term.
g. Termination. If the financial institution providing the Customer Bank Account instructs Avalara that Avalara must terminate this Agreement (for example, because Customer is conducting its business in violation of Applicable Law), Avalara may immediately terminate this Agreement upon written notice to Customer. In the event of such termination, Avalara will not refund any amounts to Customer.
5. AFC Returns Guarantee. Avalara provides a guarantee of the timeliness of AFC Returns prepared and filed through Avalara Returns for Communications (the “AFC Returns Guarantee”) under the following terms:
a. If Customer receives a notice of late filing, failure to file, or a failure to remit Taxes that results in liability for penalties or interest due solely to Avalara’s failure to timely prepare and file an AFC Return it was obligated to file or timely remit Taxes it was obligated to remit (an “Avalara Error”), Avalara will pay Customer the lesser of either: (i) the amount of the penalties and interest that directly result from the Avalara Error, as specified in the final assessment notice received from the applicable Filing Jurisdiction after all administrative appeals and abatement options are exhausted, or (ii) the amount of AFC Return fees paid by Customer during the month in which the Avalara Error occurred (as calculated in accordance with subsection (c) below).
b. The following limitations apply to the AFC Returns Guarantee:
i. Customer must have met its obligations under the Terms and these AFC Terms, including providing and maintaining accurate, complete, and current Filing Information and Tax Data; timely and sufficiently providing all Tax Data and Tax Funds; and timely paying AFC Returns fees. To the extent the Avalara Error was caused by Customer’s failure to perform any of its obligations in these AFC Terms or the Terms, the AFC Returns Guarantee will not apply.
ii. Customer must not have requested changes to Customer’s Estimated Taxes after the Estimated Taxes Approval Deadline.
iii. Customer must promptly forward any notices and relevant information from the Filing Jurisdiction within 10 days of the date of the notice.
iv. Customer must assist Avalara in challenging the Filing Jurisdiction’s findings if Avalara deems it appropriate in Avalara’s sole discretion.
v. Customer must assist Avalara’s efforts to abate or reduce the amount of penalties and/or interest imposed by the Filing Jurisdiction.
c. For purposes of calculating the amount of the AFC Returns fees paid that are eligible for the AFC Returns Guarantee payment, the amount will be the fees actually paid by Customer to Avalara for AFC Returns during the month in which the Avalara Error occurred. For clarity, the parties acknowledge that fees paid for AFC Returns do not include any fees paid for ancillary Professional Services or any other one-time fees.
d. If the audit implicated other issues in addition to the alleged Avalara Error, the amount to be paid by Avalara under this AFC Returns Guarantee will be the percentage of the final assessment amount equal to the percentage of the final assessment related to the alleged Avalara Error.
e. Avalara shall make the AFC Returns Guarantee payment to Customer within 30 days after the date that Avalara receives the final assessment notice from the applicable Filing Jurisdiction, 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 Avalara Error will cease on the date of the payment.
f. Customer must have a current AFC Returns subscription in good standing when the claim is submitted to Avalara to be eligible to receive payment under this AFC Returns Guarantee.
6. Pricing. The pricing for AvaTax for Communications and Avalara Returns for Communications includes an annual subscription fee (“Subscription Fee”) and usage-based fees for each Service.
a. Subscription Fee. Avalara will invoice Customer for the Subscription Fee at the beginning of the Initial Subscription Term and each Renewal Subscription Term.
b. Usage Fees. Avalara will invoice Customer for usage-based fees as set forth in the Order Document.
c. Other Fees.
i. Registrations/De-Registrations. If Customer requests to be registered or to have its registration cancelled in a tax jurisdiction, Customer shall pay a fee per registration or de-registration performed.
ii. Non-Standard Forms. If Customer requests (1) a form that is not offered by Avalara as a standard form; or (2) a standard form that requires non-standard modifications to the standard form (each a “Non-Standard Form”), Customer shall pay Avalara’s then-current per-hour rate, in 1/10 hour increments, for preparation and filing of the Non-Standard Form (one hour minimum per Non-Standard Form).
iii. Back Filings. If Customer requests an AFC Return or Non-Standard Form be filed that is past due, Customer shall pay the per-AFC Return fee in addition to Avalara’s then-current per-hour rate, in 1/10 hour increments, for preparation and filing of the AFC Return or Non-Standard Form (one hour minimum per back filing).
iv. Multiple Remittances. If a taxing authority requires Avalara to remit Customer’s AFC Return multiple times, each remittance will count as one AFC Return.
v. Additional Fees. If Customer fails to timely and completely provide accurate Filing Information, Tax Data, or Tax Funds, as applicable, or otherwise fails to fulfill any obligations under these AFC Terms, or if Customer requires a change to the standard process described in these AFC Terms, Avalara may charge Customer additional fees. For example, Avalara may charge a fee: (i) for Avalara to unlock Customer’s Estimated Taxes after the Estimated Taxes are approved; (ii) for Avalara to change or reconcile requests received after the Estimated Taxes Approval Deadline; or (iii) for Avalara to make a change to Customer’s Estimated Taxes, Filing Information, AFC Return(s), Tax Data, Tax Funds to be remitted, or any other standard process.
7. Compliance with NACHA Operating Rules. The funding process described in Section 4(e) (Funding) of these AFC Terms may be subject to the Operating Rules of NACHA, the organization that regulates the ACH network in the United States.
a. To the extent that Customer’s funding is governed by the NACHA Operating Rules, Customer specifically agrees to the following NACHA requirements:
i. Customer will comply with all applicable requirements under the then-current version of the NACHA Operating Rules;
ii. Customer authorizes Avalara to originate the funding requests described in Section 4(e) (Funding); and
iii. Customer will comply with the laws of the United States in providing such funding.
b. In addition to any other applicable termination rights, Avalara may terminate the Agreement for Customer’s non-compliance with the NACHA Operating Rules if such breach or non-compliance is not cured within 10 days of Avalara first notifying Customer of its non-compliance.
c. Avalara has the right to audit Customer’s funding process, at a time and location mutually agreeable to both Customer and Avalara, to ensure compliance with the NACHA Operating Rules and the Agreement.