Automated Tax Calculations using Avalara

Set up AvaTax by Avalara to add automatic and comprehensive tax calculations to your Stripe orders. If you need help after reading this, check out our answers to common questions or chat live with other developers in #stripe on freenode.

We’ve integrated Avalara’s AvaTax product directly into Stripe’s Orders API. The Orders API allows users to represent their inventory and orders within Stripe, rather than on their own site or through a third-party. If you are not yet familiar with the API, we recommend that you first visit the Orders API Overview documentation before diving into tax calculations.

To enable dynamic tax calculations for your orders, simply:

  1. Create your Avalara account
  2. Activate Avalara in Stripe

After doing those two steps, you can optionally learn how Orders API tax integrations work including support for tax codes and value-added tax (VAT).

Step 1: Create your Avalara account

If you don’t already have an Avalara account, create one by registering at the Avalara Sign-up Page. After creating the account and logging in, you will receive an email with your Avalara account credentials. From that email, two specific items are needed to activate the Avalara integration in Stripe:

  • Your Avalara Account Number (production)
  • Your Avalara License Key (production)

(You can also find these in your Avalara settings.)

The Avalara AvaTax setup process is well guided, with plenty of additional help materials. Be certain to define your jurisdictions–where your company reports taxes–and complete all the Avalara-recommended tasks. Finally, test the tax calculator within Avalara to confirm it’s making the right decisions for your business.

In terms of your Stripe integration, understand:

  • Avalara asks for your Company Code; you can create your own for use with Stripe
  • You do not need to download and install any software, as Stripe’s Orders API directly integrates with AvaTax

Once you’ve complected the activation and are comfortable with how Avalara AvaTax functions, activate it in your Stripe account.

Step 2: Activate Avalara in Stripe

To activate Avalara in your Stripe account:

  1. Log into your Stripe account and navigate to the Orders Settings.
  2. Choose Live mode under Settings, then click Change tax next to the Taxes setting.
  3. Choose Provider under Type and Avalara under Provider.
  4. Enter your production Account Number and License Key into the fields in the form. (These are the values Avalara emailed to you.)
  5. If you have multiple companies under the same Avalara account (this is not common), you can specify which company Stripe should use via the Company Code field.
  6. Click Update to validate your credentials.

If the pop-up disappears without error, your Avalara integration is live! If the message Invalid Avalara production credentials appears, Stripe was unable to connect to Avalara using the credentials provided. You should verify your credentials and contact Avalara if you’re unable to progress through the activation.

Avalara’s AvaTax only has a live mode, not both test and live modes like Stripe. For that reason, only Avalara production credentials can be used to activate Avalara in the Stripe Dashboard. We automatically validate your credentials when you connect to Avalara, and test credentials will be refused.

As a final step, verify your Stripe account’s legal entity address in the Dashboard’s main settings page. When calculating taxes, Avalara uses an Origin address and a Destination address. The Origin address is set to your Stripe account’s legal entity address. The Destination address is set to the shipping address for the order.

Completing these two steps fulfills the activation process. If you would like to learn more about how the integration works, you can read the Orders tax integration overview.