This section explains how Avalara calculates taxes for charge invoice item adjustments in Zuora, including the creation and validation of tax invoice item adjustments.

Adjusting an invoice item with a processing type of Charge or Discount will result in a charge invoice item adjustment. The Avalara Integration calculates taxes for charge invoice item adjustments through the Zuora UI and SOAP API. When you create charge invoice item adjustments in the Zuora UI, tax values are calculated by Avalara synchronously. Zuora records these taxes as invoice item adjustments. You can view these tax invoice item adjustments from the Zuora adjustment list after the charge invoice item adjustments are processed. For each charge invoice item adjustment, Zuora creates a corresponding invoice item adjustment for each tax item returned from Avalara.

When Avalara Integration calculates taxes for charge invoice item adjustments, Avalara might return an extra tax item with a 0% tax rate. Zuora validates all the tax items when creating invoice item adjustments, but this extra tax item is ignored during the tax item validation.

The following figure gives an example of the credit-type charge invoice item adjustment (IIA-00000174) and its tax invoice item adjustments (IIA-00000175 and IIA-00000176).

You can also view the transaction details and tax items in Avalara.