Optimizely B2B Commerce provides two different ways to calculate taxes - use the built-in B2B tax calculator or integrate with a 3rd-party tax system. Our built-in tax calculator works well for customers who are looking to provide a rough estimate of taxes for an order, but are not looking for fully tax-compliant calculations.
The built-in tax calculator can estimate taxes based on ZIP/Postal Code and/or State/Provinces, with a single configurable percentage for each record. The State/Province tax configuration can support two separate tax rates, which helps account for Canada tax (such as HST, GST & PST).
Because of the complex tax rules (such as multiple tax jurisdictions for a given ZIP/Postal Code, product category rules unique per jurisdiction, and so on), Optimizely highly recommends using a 3rd-party tax system like Avalara or CyberSource. These systems are built to ensure tax calculations are compliant with local jurisdiction rules.
During the checkout process, customers are allowed to checkout with addresses that the tax provider deems invalid. There are business reasons for allowing this, for example the address might be new construction that does not exist yet or the customer's site configuration may not allow address editing and their ERP data is incorrect, but we do not want to prevent the collection of the order. In these cases, customers receive a message indicating the ship-to address is invalid and we cannot calculate tax for the order at this time. The tax on the final order summary shows as TBD.