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# Core concepts

Learn about key features, including tax explanations and forward-thinking insights, to understand and manage tax compliance effectively.

## Explain the tax

After tax is calculated on a transaction, users can select **Explain the tax** to view a comprehensive breakdown of how tax was determined.

Explanations may include:

* Jurisdiction-by-jurisdiction rate breakdown

* Sourcing methodology applied

* Exemption status and certificate usage

* Special rules or adjustments that affected the calculation

The AI agent translates calculation data into plain language to support clarity and review.

## Proactive insights

The AI agent surfaces relevant tax insights automatically before and after calculations.

Examples include:

* Upcoming exemption certificate expirations

* Special tax scenarios such as caps or reduced rates

* Jurisdiction-specific considerations

These insights help users identify compliance risks and act when needed.

> **Note**
>
> Part of the **Tax transparency** AI use case. [Open the full "Core concepts" section on Avalara](https://developer.avalara.com/tax-transparency/nul8821266807751/).