Scope
What are the prerequisites for address validation in Avalara integration?
Avalara addresses validation prerequisites
Why my customer is not charged for tax using Avalara configuration?
Summary
Your Organization address should be updated from Settings > Configure Chargebee > Business Profile. As well as the Customer's shipping address or billing address has to be collected via hosted pages in Chargebee by enabling it in Fields from Settings > Configure Chargebee > Checkout & Portal. Also, Avalara's address validation in Chargebee has to be enabled for taxation purposes.
Solution
Prerequisites
1. Organization Address: Avalara requires your business address to calculate tax for an invoice. The Organization Address you provide in your Chargebee site will be used by Avalara for this purpose, and will also be stored as the Origin Address in Avalara. In order to use the Avalara integration, the Organization Address in Chargebee should have at least the Country, State, and Postal Code filled.
The Organization Address can be configured for your site under Settings > Configure Chargebee > Business Profile.
Here's a checklist you could use to integrate Avalara with your Chargebee site:
Ensure that your site's Organization address is filled out accurately in both Avalara and Chargebee.
If you're using Hosted Pages, ensure that the shipping/billing address field has been enabled and the Zip Code, Country, and State fields are made mandatory.
If you're an API user, ensure that the address is passed in the estimated API only if you want the tax to be calculated. If the address is present, you will be charged for the tax estimate lookup.
2. Address for Tax Determination: Chargebee will use your customer's shipping address to calculate tax. If the shipping address is unavailable, then the billing address would be used for the same.
Note: If you're using Hosted Pages, ensure that:
1. The Shipping/Billing Address field has been enabled. This can be done under Settings > Configure Chargebee > Checkout & Portal > Fields.
2. The Zip Code, Country, and State fields are made mandatory in the hosted pages.Configuration
Under Shipping Address Validation you can,
Choose to turn on Avalara's address validation support to validate your customers' shipping addresses.
Allow customers to sign-up with partially valid addresses, and Chargebee will mark their shipping addresses as partially valid.
Once you are done, click Proceed
After Configuration
Validating Addresses for Existing Customers
For customers who have signed up before enabling Avalara, Chargebee will cancel their subscriptions during renewal if the tax cannot be determined. To identify subscriptions that are at risk of getting cancelled, Chargebee provides a validation tool. The subscriptions which are on the verge of cancellation can be determined using this tool and you can view the Invalid address details.
Under Validate Existing Addresses, choose your respective taxable regions for which you want to run validation, and click Run Check.
During the first-ever check that is run after the integration is configured, the tool will validate all the existing Subscriptions' taxable addresses. If the shipping address is present, then it will be used for the validation. If the shipping address is not present, then the billing address will be used instead. Subsequent checks for address validation will check only the addresses that are added after prior validation and not all the addresses. You can look for any possible address errors and have them fixed.
In order to validate the address, Chargebee will make a tax estimate call to check if the address is taxable. If the taxable address happens to be the Shipping Address and if Avalara's Shipping Address Validation is enabled, an additional check will be made to validate the complete address.
Avalara Address Validation
You can use Avalara's Shipping Address Validation (for example Street Address) for a more accurate tax calculation. This is especially useful if your business involves delivering physical goods. A valid street address would mean lesser goods returning to you. The Shipping Address will be validated for every "Add/Update Shipping Address" operation.
When this option is enabled, the customer's shipping address is checked, if the address is invalid, an error is generated. The customer will then have to edit the address before completing the sign-up process.
Allow Customer to sign-up with/update Partially Valid Address
If the address is incomplete but Avalara is still able to return the tax rate, then this address is considered a partially valid address.
The "Allow Customer to sign-up with/update Partially Valid Address" option has been provided to ensure that your sign-up is not affected due to invalid street addresses. If this option is enabled, Chargebee will allow partially valid addresses during checkout. These will be marked as ‘partially valid' in your Chargebee site. You can then filter the addresses from the web interface, and contact the customers to receive the correct address details.
Note:
1. The address validation check for existing customers has to be done before going live with Avalara.
2. Once an address is validated and its validation status has been set, the address will be ignored during subsequent checks.
3. If you're collecting the Billing Address from your customer, the billing address will be marked as partially valid/invalid.
4. The addresses for sign-ups that occur after validation and before enabling tax might get through without validation/might surpass the validation check.Validation Status
The possible address validation statuses are:
Not Validated: No validation check has been done. By default, all addresses will be marked as not validated.
Valid: Avalara address validation is successful.
Partially Valid: Address validation was not successful but essential fields for tax calculation are present. The error message Avalara address validation has failed will be displayed.
For more information, refer to this link.
Avalara Integration FAQs
Q1) If a customer is created in Chargebee without any billing/shipping address, then on renewal will the subscription be canceled or non-taxable with Avalara tax conf?
Ans: If there is no country in the address, then the validation will not be performed. If a country is available and if that country is enabled for a third party, then the address has to be validated for taxability. For Avalara usually zip code and country are necessary, but they can vary from country to country.
Q2) Once Avalara validation is enabled, customers would not be able to pass invalid addresses during checkout but what happens to user-created customers via UI and API? how do we validate those addresses?
Ans: There are two types of address validation when it comes to Avalara. Full address validation and taxability check. Full address validation is an optional configuration available to merchants in the US. They need to use it only if they want to validate the full address. The taxability check is a must-have for all addresses, in most cases the third-party taxes will be able to return taxes based on zip codes or country details. But as mentioned in the above answer, the parameters needed for taxability can vary from country to country. But if the address cannot pass a taxability check, they won't be able to proceed.
Q3) Once Avalara is enabled for a specific region, ie US in Chargebee settings, there is no way to override the taxes for this region within Chargebee for any plans or subscribers that belong to USD/US right?
Ans: Once a third party is enabled for taxes for a region, the entire decision on taxes will be done by the taxation provider. Chargebee will only supply the required information to decide the taxes. If they want to override taxes, they should be able to do so on Avalara's interface. Avalara allows custom rules. If you are referring to restricting tax calculation for certain nexus regions in the US, then it is possible in Chargebee in the US taxes page.
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