Address validation is crucial for sales tax calculations to ensure accuracy and compliance. Tax rates vary widely based on geographical jurisdictions, item taxability, and sourcing rules. An incorrect calculation can lead to over or underpaying taxes, which may result in legal issues and financial penalties. By validating addresses, businesses can confidently apply the correct tax rates, meet their legal obligations, and maintain the trust of their customers by providing transparent and fair pricing.
TaxCloud validates street addresses through our VerifyAddress API. Presently, our service only supports address validation within the United States, but we plan to extend it beyond the US in the future. Hence, we kindly ask our users to refrain from sending non-US addresses for verification at this time.
For proper and complete sales tax calculation, these data points are required:
Origin and delivery Street Address to determine the applicable sales tax jurisdictions.
Date of Sale to determine the applicable sales tax rates for each applicable jurisdiction.
Product or Service Category to determine if any product or use-based exemptions are available.
A valid set of API Credentials is required. You can find your API credentials by logging into the TaxCloud portal and selecting Stores.
VerifyAddress ResponsesTaxCloud will not prevent checkout if address verification fails. Calculations will continue based on the information received but could be inaccurate if we’re missing the full address, including, street address, city or locality, state, and 9-digit postal code.
If the ErrNumber = 0 = TaxCloud verified the address to use for future Lookup API calls.
If the ErrNumber = [anything else] = TaxCloud could not verify the address, proceed with the customer-provided address for subsequent Lookup API calls. Verification can fail for a number of reasons - new or updated address or misspelling.
Once you have verified your customer’s shipping or billing address, next is to make a sales tax Lookup call.