DAVO Sales Tax Frequently Asked Questions

Who Uses DAVO?

If you are a brick and mortar business and you sell things, chances are you have to collect and pay sales tax. DAVO can do it for you.

Why Should I Use DAVO, I Have a Bookkeeper?

If you ever paid your sales tax late and paid a penalty or worry about having enough money to pay your sales tax you should be using DAVO. DAVO is like an insurance policy against ever missing a sales tax payment. We GUARANTEE your sales tax will be filed and paid on-time and in-full. Does your bookkeeper give you that guarantee?

What Does DAVO’s Guarantee Mean?

DAVO GUARANTEE* means your sales tax will always be filed and paid on-time and in-full, provided DAVO has collected all of the sales tax funds due to the State for the filing period and that your filing credentials are in working order.  See DAVO Sales Tax Guarantee in Section 7 of our Terms of Use. DAVO stands behind our service and if we file and pay your sales tax late, we will pay the fines and penalties.

How Does DAVO Work?

DAVO uses sales data from your POS to determine the exact amount of sales tax you collect every day.  DAVO transfers the sales tax you collect from your bank account to DAVO’s tax holding account daily. This ensures sales tax is always set aside.  When your sales tax is due, DAVO files and pays it for you.

Where Does My Sales Tax Go?

DAVO transfers sales tax revenue from your bank account to DAVO’s secure tax holding account.  This account is bonded and insured. Once we file your sales tax return, your sales tax funds are paid directly to the State, on-time and in-full.

I Have Taxable and Non-Taxable Sales, How Does DAVO Know the Difference?

When you set-up your POS and enter the items you will sell, you assign either a tax rate or no tax to each item (taxable or non-taxable). Your POS determines the amount of sales tax on each sale and DAVO uses that data to know exactly how much sales tax to set aside.

Does DAVO Only Collect Sales Tax on Credit Card Sales?

No.  DAVO collects sales tax on total sales including cash, credit, debit, gift card, check, etc.

Can You Tell Me What the Tax Rate Is For My State?

We have basic sales tax information for each state in our Resources section. However, we do not know detailed tax rates by items and we do not recommend searching for them online.  The best way to determine your tax rate is to get it directly from your State Department of Revenue.  Each state’s website is listed in our Sales Tax Information by State section.

How Does DAVO Account for Refunds?

Refunds are calculated in the POS and refunded sales tax is subtracted from your total daily sales tax collected.

Why do I need to provide my bank routing and account number when I sign up for DAVO?

After each day, DAVO syncs with your POS and determines how much sales tax you need to set aside for that day’s sales. We need your banking information to transfer the sales tax you collected that day into our secure tax holding account. We will hold the money in that account until your sales tax is due, and then we will file your sales tax and pay it with the funds we have set aside for you.

Your bank account information is also how DAVO’s monthly subscription is paid, except Clover and Poynt systems. Clover and Poynt bill through their system.

How will the daily debits come through in my bank account?

Daily debits will come through on your statement as DAVO by Avalara. This name changed in August 2021. For more information about the change, visit Avalara’s website.

I Use 3rd Party Apps like UberEats and Grubhub. How Does DAVO Account for These Sales?

Orders from 3rd Party apps should be entered into your POS as they are received.  Read more about how to manage 3rd party apps HERE. 

What POS Systems Does DAVO Work With?

Currently, DAVO is available on Clover, Toast, Square, Par Brink, Poynt, Revel, Upserve, Heartland Restaurant, Lightspeed, Vend, SpotOn, Epos Now and QuickBooks Online.  If your POS has the ability to dump your sales data into QBO daily, you may be able to use DAVO. Please contact DAVO directly for further questions.

Can DAVO Determine the Tax Rates and File Sales Tax in Multiple States or Tax Jurisdictions?

No.  DAVO is not intended for e-commerce and does not lookup sales tax rates or file in multiple jurisdictions/states for a single business.  

I Move Around in a Food Truck, Can DAVO Do My Sales Tax?

DAVO can collect and set aside your sales tax funds daily, but we cannot file for you because we do not know what tax jurisdictions your truck is moving between.  You would be responsible for changing the tax rate in your POS every time you change location. DAVO would know how much sales tax you collected, but not where you collected it.  We would refund the sales tax money we collect to you each month and you would have to file and pay the state.

Does DAVO Do Federal Tax Too?

No.  There is no federal sales tax, only state sales tax.  You may be confusing sales tax with payroll taxes.

Can DAVO File Tax Returns for Previous Tax Periods or File Amended Returns?

No.  DAVO is not an accounting firm.  We work with sales data from your POS to collect, file and pay sales tax for current tax filing periods.

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Yes, I want to make my sales tax hassles go away

Yes, I want to make my sales tax hassles go away

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