Avalara powers millions of businesses worldwide
How it works
CUSTOMERS
Solutions and features
- AI-assisted assignment of indirect tax codes
- Validation against jurisdiction-specific tax rules
- Scalable workflows for growing catalogs
- Accurate HS and tariff code assignment
- Reduced customs delays and duty exposure
- Support for global cross-border compliance
- AI-powered classification with expert validation
- Built-in research across jurisdictions
- Flexible support for high-volume or high-risk catalogs
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Tax Code Classification |
Tariff Code Classification |
Managed Tax Category Classification |
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For current AvaTax users with stable product catalogs |
For ecommerce sellers and companies doing business |
For companies with complex products and frequently |
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Lookup based on universal identifiers (e.g., UPC, GTIN, EAN, etc.) |
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Avalara tax code classification |
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Tax category classification |
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API upload |
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Multiple input formats (API, FTP, direct uploads to UI, etc.) |
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Configurable output formats (CSV, Oracle, XML, webhooks, etc.) |
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Reporting and analytics |
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Up to 1 million items per month |
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Job management within the tool |
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Special compliance considerations for SNAP, WIC, etc. |
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Professional services assistance and mapping |
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Country-specific HS code classification |
Avalara Managed Tax Category Classification is a managed service that combines an AI‑based classification engine with Avalara tax experts to map your products and services to the correct tax categories and tax codes, helping determine more accurate sales tax calculations.
Managed Tax Category Classification helps businesses keep up with frequently changing product and service catalogs, because ongoing item classification work can be time‑consuming, cumbersome, and error‑prone if handled manually.
By automating classification and applying expert review, Managed Tax Category Classification reduces the effort required to research taxability rules across jurisdictions and helps ensure more accurate tax treatment up front.
Your business provides a product file with SKUs and descriptions. Managed Tax Category Classification first matches your items against our large proprietary database of previously researched and tax‑coded products.
An AI‑powered mapping engine then assigns preliminary tax codes for any items that don’t match, and the Avalara tax classification services team reviews and validates the results before returning a completed file for you to load into AvaTax or your own systems.
Managed Tax Category Classification is ideal for companies with complex products and services, and frequently changing catalogs — especially those with large SKU counts. Typical industries include retail and ecommerce, grocery and convenience, food and beverage, software and technology, business services, manufacturing (including medical equipment), and construction.
Managed Tax Category Classification can be used by new customers implementing AvaTax as well as existing customers who want to improve or reevaluate their current product mappings.
Accurate product classification is a key input for calculating the right tax. Managed Tax Category Classification maps products and services to the appropriate tax categories, which supports more accurate tax rate determination and reduces the risk of penalties or audit assessments caused by incorrect classification.
By keeping classification details current and consistent, Managed Tax Category Classification helps you mitigate both under‑ and overcollection of tax.
No. Managed Tax Category Classification is designed to augment your internal resources by automating the heavy lifting of item classification and providing access to Avalara experts for more complex scenarios.
Your tax and finance teams remain in control of policy decisions and how classifications are applied within your broader compliance processes.
Managed Tax Category Classification is a cloud‑based service that scales from dozens to millions of items. It supports multiple input and output options (such as API, file transfer, and direct uploads) and can produce configurable formats like CSV or XML, making it easier to feed classified data into AvaTax and other business systems.
Because Managed Tax Category Classification maps items directly to Avalara tax codes, it can be used as part of an end‑to‑end automated tax calculation workflow with AvaTax.
Managed Tax Category Classification is sold as a managed service with custom pricing based on factors like the initial size of your product catalog, complexity of product catalog, and catalog growth over time. Your Avalara representative will scope your requirements and provide a tailored quote.
Avalara Tax Code Classification (included in AvaTax) is best for current AvaTax users with relatively stable product catalogs who want AI‑powered tax code suggestions, often using universal identifiers like UPCs or GTINs.
Managed Tax Category Classification, by contrast, is designed for companies with more complex, frequently changing catalogs and provides full tax category classification plus professional services assistance and managed mapping at higher volumes.
Typically, you’ll be asked to provide:
- A product catalog or item file (for example, SKUs with descriptions and any relevant attributes).
- Information about how many products and services you offer and how often they change.
- Details on where and how you sell (channels, regions, B2B/B2C, marketplace structure, etc.).
- Any existing classification approach or tax engine you’re using today (such as AvaTax).
These inputs help Avalara scope your project and configure the classification process for your business.