Core Issue:
Shopify users integrating Avalara for sales tax face challenges distinguishing TikTok Shop orders from webstore transactions. TikTok withholds and remits its own sales tax as a marketplace facilitator, but Avalara receives all Shopify orders without clear channel identifiers, risking double taxation.
Root Cause:
Shopify assigns uniform order numbers regardless of sales channel, providing no native way to differentiate marketplace orders. Neither Shopify nor Avalara support teams have resolved the integration gap to automatically flag marketplace facilitator sales.
Workarounds Discussed:
Manual monthly reconciliation: Export sales reports from Shopify by channel and Avalara transactions, match order numbers in Excel, then import updates to zero out tax on marketplace orders (~15 minutes monthly)
Custom Avalara rules: Set up marketplace designations with “Marketplace remits” status and location codes, though some users report rules don’t auto-apply and require manual recalculation per transaction
Connector settings: One user enabled the “Channel_Liable” field in Silk ecommerce connector to prevent TikTok transactions from flowing to Avalara entirely, avoiding a $112,000 overpayment but requiring manual return adjustments
Additional Complication:
TikTok orders sometimes show the warehouse address instead of customer shipping address in Avalara, despite correct data in Shopify.
Status: Ongoing issue with no native solution; users rely on manual workarounds pending potential future TikTok Shop integration.
Summarized with AI on October 27.
AI used: claude-sonnet-4-5-20250929.
I currently use Avalara (avaTax) for sales tax calculations and returns . Challenge is there doesn’t seem to be any discernable difference between order number info that comes from Shopify to Avalara, based on the sales channel. I primarily sell on Tiktok and my own webstore/app. Meaning, I need to find a way to identify TikTok orders in Avalara so I’m not double taxed (TikTok withholds/remits tax on its own).
It appears Shopify auto-generates their own unique order number for every transaction. If I could somehow add an identifier to that number (ie. TTxxxxxx) then I could strip out the sales in Avalara.
Hey there, @gdrinkh2o ! Thanks for taking the time to reach out to the Shopify Community Forums with your question around adding identifiers to these orders within Avalara!
I quickly consulted with the Tax Team regarding your question and they advised that it may be worthwhile to reach out to Avalara’s Support Team regarding this request.I have a link to their Support Pages here that you can use to connect with them regarding this request to see what options they may have available to help Avalara differentiate between these orders and their sources! -Imogen
Thanks. Yes- I had already contacted them and waiting on further direction. Their position remains that unless there is some type of identifying number, code, info, etc. that comes from shopify, there is no way for them to separate.
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 sales and marketplace facilitator sales.
The work around @gdrinkh2o that I’ve come up with is at the end of every month, I export a sales report from Shopify for the Amazon/TikTok sales channel to Excel. Then I export all the transactions for the same time period from Avalara to Excel. Once I have the two data sources, I can look up on the order number to find the Amazon transactions on the Avalara side. Lastly, I build our a transaction import file that updates the tax amount to $0 for all the Amazon transactions in Avalara. It takes me about 15 minutes for this process. I hope that helps
Hi, there are definitely some required workarounds but they work until there’s hopefully one day a TikTok Shop integration. I work with several multi-channel digital brands selling on Shopify, Amazon, Meta Shop, and TikTok Shop. Meta Shop and TikTok Shop both require workarounds including: adding them as marketplaces within Avalara (with the “Marketplace remits” designation), adding custom rules so that Avalara can distinguish which transactions are coming from these different marketplaces, and lastly and the worst part, manual transaction export from Shopify, some manipulation to get it into the correct import format, then importing those transactions into Avalara each month. That’s the high-level view of what’s required.
Hi,
On Avalara you can set marketplaces and they will not even show up on the Avalara reports. At least I tested it and that was in our case.
On the other hand we have an issue with TikTok sending through the order WITH the tax included on the lines, which makes no sense to me. The order should come NET, and tax should only be shown on TikTok as they collect and remit. How do you make that work?
We are double paying tax on the TikTok transactions and all TikTok transactions have our warehouse address as the ship to address in Avalara. (Oddly Shopify has the correct ship address but some how this info is not being passed to Avalara.)
I used the Avalara rules to add location code “TikTok” to any transaction where the ship to address = our warehouse.
The TikTok location code has the “Marketplace remits” designation.
These rules are not being applied as the transactions come in. I have to select the transaction and recalculate in Avalara for the rules to be applied.
Am I doing something wrong?
Is there a way to have the rules be applied automatically?
You have the right idea, I would just go back and check the rules to ensure you have it set for a ‘location code’ and then make sure the filters match what you’re needing. The custom rules can be finnicky sometimes.
To avoid Avalara double paying tax on Tiktok transactions we turned on the Channel_Liable field in the Silk ecommerce connector. This will prevent the transaction from flowing into Avalara. For us this was the best solution.
Not sure if that would be the best way, as the sales from TikTok still need to be included on the sales tax filings, but they need to be done so in a way that shows the taxes were paid by TikTok. Excluding them from Avalara wouldn’t accomplish this and it would then serve to have the sales tax filings be under-reported, creating another set of problems.
After we overpaid tax by $112,000 in one month when the my market place remits location code didnt take. Finding out how to prevent the transactions from flowing to Avalara was the best solution for us. This means we have to add a returns adj for WA BO.
Having this issue now, but it’s with Collective Supplier orders. This is what I was told, “Currently, Avalara for Shopify does not provide a way to populate or customize the location code field for Shopify-originated transactions through its standard features. All Shopify orders will appear in Avalara under the mapped Avalara company, but the location code will remain blank, unless you pursue a custom integration or advanced API workflow.” To find the location code in Shopify go to the report called Total Sales by Sales Channel. Add the dimension of Sales Channel ID. Each sales channel has a unique one. Then go into Avalara - Settings - Marketplaces - Click on the Marketplaces tab, and add each location code per their instructions. However, their instructions are incomplete in set up a marketplace location in Avalara. It does not include instructions for what to put AFTER the #6 of choose the effective date. The last section under Attributes I chose “is marketplace” and value of “yes”. At this time, you can’t use the same location code more than once to put in a new address for each Collective Supplier retailer you are connected to so I just left it as my address for now. Find instructions for creating advanced rules for marketplaces. Then you go into Settings - All Settings - Custom Rules click Manage - click Transaction Rule tab - click transaction rule. Follow instructions you found. I used Location Code as a Field equal to any of these: ‘enter location code’, then select the location code from the drop-down (this comes over from the marketplaces’ location codes you added). You can add a rule set for each marketplace you set up.
Then, unfortunately, you will have to go to every marketplace transaction in Avalara and edit it to add the correct location code. But, when you go to Returns - Approve Returns and look at the details, the tax will now show up under Adjustment Type - Marketplaces.
I just did all of this yesterday after 3 weeks of back and forth and wrong and conflicting information. It looks to be correct. My latest correspondence with Avalara is that the Shop App orders do not come over, so any companies that use Avalara for full nexus tracking will need to take those transactions into consideration. In addition they told me that All Shopify orders will appear in Avalara under the mapped Avalara company, but the location code will remain blank, unless you pursue a custom integration or advanced API workflow.” I don’t understand, why a custom integration is necessary when the information is available from Shopify. It just needs to come over to Avalara and then we need to have it set up correctly (as stated above) in Avalara.
In regards to using my address for the marketplace, probably shouldn’t and may change it to the most active retailer to show it is coming from another state. I did mention that to Avalara also. By being able to use the friendly name when setting up a marketplace rather than the location code when utilizing the drop down.
Hope this helps. I am a very squeaky wheel. We pay a significant amount to Avalara, and we have also upgraded support. I want what we pay for.
@gdrinkh2o, I believe that when an order is placed through TikTok, tags or note attributes are automatically attached to the corresponding Shopify orders. Please verify this once.
Update: I had a meeting last week via screen share with Avalara Support because they had another solution It didn’t work. Per the tech, the sales channel id in Shopify is not the location code in Avalara (like the previous tech stated), but is called origination site ID in Avalara. Not sure which one is right at this point. Within the special rule, above they wanted me to make a change and it didn’t work. Even when I reran a different transaction. I emphasized that, (as I previously stated above) having created the marketplace location and special rule, the manual step of going back into Avalara to enter the location code and rerun the transaction should not be required. There are way more Shopify stores that do more sales on marketplaces than we do and I can’t believe this is not something that is automated. All the necessary transaction information comes over, but the one identifier seems irresponsible to not be communicated between each other. I have now been escalated to Tier 3 support.
