Does sales tax calculated by Avalara count toward ASC 606 transaction price?

The practical expedient, precisely

ASC 606-10-32-2A gives an entity an accounting policy election: exclude from the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, and collected by the entity from a customer — sales, use, value-added, and some excise taxes are the standard's own examples. It's framed as a presentation election, not a recognition question: the tax was always collected on behalf of a third party, not earned as revenue, but the election governs how that fact gets reflected in the transaction-price calculation and disclosures.

What the election doesn't cover

The scope has real edges. Taxes assessed on an entity's total gross receipts, rather than tied to one specific transaction, fall outside the election. So do taxes imposed during inventory procurement, and tariffs incurred acquiring goods — those aren't "imposed on and concurrent with a specific revenue-producing transaction" in the way the practical expedient requires, so they can't simply be netted out the same way sales tax can.

Where Avalara's own data already separates this

Loopfour's Avalara integration reflects this distinction structurally, not just as an accounting convention layered on top afterward: a created transaction's totalTax field is separate from totalAmount, and grandTotal (totalAmount plus totalTax) is the figure a downstream payment step actually charges the customer — not the revenue amount. That separation makes applying the ASC 606 election straightforward on the data side: totalAmount is the transaction-price candidate; totalTax is the amount the election lets an entity exclude.