Please, check this article https://developer.avalara.com/avatax/dev-guide/locations/location-based-reporting/

If you consider you need to define location codes, you need to define them first in your Avatax console, by going to Settings – Company Locations – Add a location.

Then, you need to identify them on the SAP side.

• Reporting Location Code

This is a field at the header level in the AvaTax transaction, that will help to identify the transaction for location-based reporting requirements.

The UDF created by the AvaTax add-on is U_ARGNS_LOCATION, at the document header level.

• ShipFrom and ShipTo Location

AvaTax allows you to define Locations in your console, that can be used in the ship-to and ship-from address details of your document transaction.

In order to use this, you need to define the location in your AvaTax console.

Then use the provided UDFs at the document header level or line level for this purpose. UDFs are U_ARGNS_STLOCATION (ShipTo Location) and U_ARGNS_SFLOCATION (ShipFrom Location).

Using a Location in the UDFs at the line level will overwrite a location defined at the document header level UDFs.

Using a Location will overwrite any address details sent in the transaction, with the address defined in the AvaTax console for the location.