I would guess it has to do with the way the product/variant was set up in Shopify. I'd recommend checking the json data for the gift card variant and making sure it's shows taxable as false and requires shipping as false (that is if it's a digital gi...

I think you just need to assign the correct product tax code so it's non-taxable. It works for me. 

This is an endless circle from Shopify to Avalara back to Shopify. I've have wasted countless hours trying to resolve this and neither party is willing to dive into the actual integration to make it possible to distinguish between normal taxable sale...

+1 for me! This can't be that hard to do. 

Did you figure this out? I'm wanting to know how to achieve this as well. 

I know this post is 2 years old. Did you ever find a solution to this? I've been back and forth with Avalara for 3 weeks. It took them that long to really understand the problem after sending me several solutions that didn't make sense. I'm a little ...