Avalara for Communications Supplemental Terms
Effective as of February 1, 2018
These Avalara for Communications Supplemental Terms (“AFC Terms”) govern Customer’s use of Avalara’s transaction tax calculation and return services, including AvaTax for Communications and Avalara for Communications Returns (“AFC Services”). These AFC Terms are in addition to, and incorporate by reference, the Avalara 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 for Communications Returns” 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 prepared with the assistance of Avalara.
d.“Taxes Calculated” means the total of all taxes, surcharges, and fees in the .scl 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
e.“Transaction” means an electronic request submitted by Customer to AvaTax for Communications. Avalara calculates Customer’s Transaction usage on a monthly basis. A Transaction may be referred to on a Sales Order by the letter “T” when preceded by an amount.
2. Services Term. The Initial Subscription Term will commence on the Effective Date and continue for one calendar year from 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 before the 16th day of the month, the Fee Commencement Date will be the first day of that month; or
b. if the Effective Date is after the 15th day of the month, the Fee Commencement Date will be the first day of the following month.
3. Avalara for Communications Returns Services.
a. Account Set-Up. Customer shall provide Avalara with all information requested by Avalara to establish and set up Customer’s Account for Avalara for Communications 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 Affiliates) for which Avalara will be preparing AFC Returns (the “Filing Entities”) and which Filing Jurisdictions apply to each entity; (iv) tax registration numbers and log-in information for each entity and 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) a completed power(s) of attorney for each Filing Entity, including the power of attorney described in Section 3(e)(i), and (v) any other information necessary to properly configure Customer’s Account and the AFC Returns. Customer is solely responsible for providing and maintaining accurate, complete, and current Filing Information, and Avalara will not audit, verify, correct, or maintain any Filing Information.
b. Changes to Filing Information. Avalara will implement changes to the Filing Information no more 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 filing in that Filing Jurisdiction.
c. Tax Data.
i. Avalara does not audit, validate, or verify the data necessary to properly complete a tax return (the “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 the AvaTax for Communications Service.
iii. If Customer uses a tax calculation system other than AvaTax for Communications,
1. Customer will provide its tax data file in an electronic file supported by Avalara to Avalara each month 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 Returns, file the AFC Returns late, or decline to file Customer’s AFC Returns 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, and the resulting data set is part of Customer’s Tax Data.
d. Tax Liability. Based on Customer’s Tax Data and Filing Information, by the first calendar day of each month Avalara will provide Customer with an estimate of Customer’s tax liabilities due to Filing Jurisdictions that 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 fourth calendar day of the month for AFC Returns to be filed in that 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 month, and any AFC Returns and tax amounts due (the “Taxes”) will be submitted based on the Estimated Taxes and Filing Information.
e. Funding. In accordance with this Section 3(e), Customer shall make sufficient funds available to pay the Taxes for any applicable AFC Return (“Tax Funds”) by the fifth calendar day of the month in which the Taxes are to be remitted to the Filing Jurisdictions. Avalara will notify Customer of the Estimated Taxes due through Customer’s Account by the first calendar day of the month and will pull the funds after the Estimated Taxes are approved pursuant to Section 3(d). Avalara does not provide any Tax Funds. Notwithstanding any other provision of this Agreement, Customer shall defend, indemnify, and hold Avalara and its Affiliates, licensors, officers, directors, employees and representatives harmless from any loss, cost, damage, liability, or expense (including, but not limited to, reasonable attorneys’ fees) arising out of or related to Customer’s failure to timely and adequately provide available Tax Funds for Customer’s 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 for Communications Returns fees by ACH or wire transfer, at Avalara’s sole discretion (the “Customer Bank Account”). 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 for Communications Returns fees, 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 plus any interest or penalties that may accrue. Avalara may suspend or terminate Customer’s subscription to Avalara for Communications Returns immediately upon notice if Customer fails to timely and sufficiently fund the Avalara Funding Account or Customer Bank Account, as applicable.
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 for Communications Returns fees.
f. Avalara Responsibilities. For those Filing Jurisdictions and for those Filing Entities for which Avalara and Customer have agreed to file, if Customer timely provides Avalara all 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. If Customer (or its Affiliate, if applicable) receives any notices from Filing Jurisdictions, Customer shall immediately and no later than ten business days after the date of the notice electronically deliver to Avalara any notice from a Filing Jurisdiction. Avalara will respond to notices for AFC Returns and Taxes remitted by Avalara but reserves the right to delay response or not to respond to notices received more than ten business days after the date of the notice or, if Customer asks Avalara to expedite notice response and Avalara agrees, to charge an additional fee.
4. AFC Returns Guarantee. Avalara provides a guarantee of the timeliness of AFC Returns prepared and filed by Avalara for Communications Returns (the “AFC Returns Guarantee”) under the following terms:
a. If Customer suffers a financial loss due solely to Avalara’s failure to timely prepare and file a 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, 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 Section 4(c)).
b. The following limitations apply to this guarantee:
i. Customer must have met its obligations under the Terms and these AFC Terms, including but not limited to Section 3 (Avalara for Communications Returns Service) of these AFC Terms, including providing and maintaining accurate, complete, and current Filing Information and Tax Data, timely and sufficiently providing all 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, this 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 taxing authorities to CommunicationReturnSupport@avalara.com within ten days of the date of the notice.
iv. Customer must provide full and timely assistance to Avalara in challenging the taxing authority findings if Avalara deems it appropriate in Avalara’s sole discretion.
v. Customer must cooperate with 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 available under this guarantee, 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 Avalara Professional Services.
d. In the event that (i) Customer ultimately settles with the Filing Jurisdiction for less than the full amount claimed by that Filing Jurisdiction, (ii) the audit implicated other issues in addition to the alleged Avalara Error, 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 Avalara Error.
e. Avalara will make the guarantee payment to Customer within 30 days after 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 Avalara Error will cease on the date of the payment.
f.Customer must have a current Avalara AFC Returns subscription in good standing to be eligible to receive payment under this AFC Returns Guarantee.
5. Pricing. The pricing for AvaTax for Communications and Avalara for Communications Returns 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 Calculation. 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 a form that is not offered by Avalara as a standard form or requires non-standard modifications to the standard form (either a “Non-Standard Form”), Customer shall pay Avalara’s 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. Backfilings. If Customer requests a 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 per-hour rate, in 1/10 hour increments, for preparation and filing of the AFC Return or Non-Standard Form (one hour minimum per backfiling).
iv. Ancillary Fees. If Customer fails to timely and accurately provide Filing Information or Tax Data or otherwise fails to fulfill any obligations under Section 3 (Avalara for Communications Returns Service) of 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) to unlock Customer’s Estimated Taxes after the Estimated Taxes are approved; (ii) to change or reconcile requests received after the Estimated Taxes Approval Deadline; or (iii) to make a change to Customer’s Estimated Taxes, Filing Information, AFC Return(s), Tax Data, Tax Funds, or any standard process.