# Avalara AvaTax Introduction For a long time, many U.S. states did not tax SaaS, but that is changing as SaaS is coming an ever larger part of the economy and states are hungry for tax revenue. To learn more about why you might want to use AvaTax, check out this excellent [article](https://www.avalara.com/us/en/learn/whitepapers/sales-tax-on-software.html) by Avalara. ## Configuration Enabling Avalara Avatax in Bunny is straightforward. Once you have your AvaTax production and sandbox accounts configured, just enable the integration from the Integrations page.

Avalara integration configuration

In order for Bunny to connect to your AvaTax account, you need to provide three pieces of information, which you can find in you AvaTax admin console. * **Company code** – Your AvaTax account can have multiple company codes. * **Account number** - The account number uniquely identifies your AvaTax account. * **License key** – The license key is generated by AvaTax, but not stored there. At this point, you can go ahead and save the configuration. Bunny will validate your AvaTax credentials. Upon success, you are now ready to calculate tax on quotes and invoices. ## Other settings ### Enabled When the enabled flag is on, Bunny will make calls to AvaTax when quotes and invoices are generated. While you are still testing the setup, you can use the *Only enabled for user* setting to limited this to your own users so other users of Bunny aren't affected. ### Enable document recording When you want to record your AvaTax transactions in Avalara, make sure document recording is enabled, otherwise AvaTax will only calculate the tax, but not keep any record of the transaction. ### Sandbox environment When you are testing your Avalara integration and tax codes, you should be using the sandbox environment. You might ideally want to do that from a Bunny sandbox as well. ### Enable client side logging When enabled, Bunny will record all responses from AvaTax, which can be useful for troubleshooting. During normal operation, you can disable this. ## Using AvaTax with Bunny Once the Avalara AvaTax is configured, Bunny will do use AvaTax in a number of situations. ### Address validation In order to provide the most accurate tax calculation, it's important that addresses be validated before being sent to AvaTax. A validated US address has a 5-digit zip code with a 4-digit extension, for example 90405-2217. Your company's address under **Other > Settings > Company** needs to be validated and all account addresses that are receive quotes and invoices need to be validated. You can validate account addresses using the Validate address link in the sidebar on the account page.

Validate address

If an account address is invalid, AvaTax will return an error message to Bunny during the quote building process. ### Entity use code Entity use codes are one method for keeping track of tax-exempt customer transactions. When generating quotes and invoices an entity use code, AvaTax will exempt the transaction as long as the code is valid for the customer and region where the transaction takes place. The entity use code is located on the account's billing tab.

AvaTax Entity Use Code

For accounts that are not tax-exempt, simply choose the **Taxable** option. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.bunny.com/guide/advanced-guides/integrations/avalara-avatax.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.