Stop Taxing Shopify Amazon Orders in Avalara

If you sell on Amazon Marketplace, they are remitting the tax for you. Many Shopify clients are importing Amazon orders via Marketplace Connect app, which works great for fulfillment and tracking.

However, an issue arises when using the native app Avalara, where the newly imported transaction is taxed again. The Avalara App nor the Avalara transaction rules are capable of knowing that a marketplace has already remitted tax first.

Affected Systems

1. Shopify or Shopify Plus
2. Marketplace Connect
   1. Amazon
   2. Ebay
   3. Walmart
   4. Etsy
3. Avalara

Upon exhausting all of the configuration settings and live chat support, we came to the conclusion that using the Avalara API to sync Shopify orders was the most accurate solution.

Setup

Avalara Backend (Avalara's Guide)

1. Create a new Marketplace Location
   1. Location Code:  Amazon-marketplace remits
   2. Friendly Name:  Amazon Remit Rule
   3. Type:  Marketplace
   4. Returns for this location:  The marketplace remits sales tax
   5. Effective:  todays date
2. Create Advanced Transaction Rule
   1. Name:  Amazon Remit Rule
   2. Effective: todays date
   3. Rule:  Reference Code contains any of these amazon
   4. Location Code: Amazon-marketplace remits

Avalara API + Programming

Using the Avalara API Transaction CreateOrAdjust, we are able to send over full order details and include the marketplace source under the key 'referenceCode'.

Endpoint:  https://rest.avatax.com/api/v2/transactions/createoradjust

Payload:  'referenceCode' => 'amazon'