diff --git a/.changeset/tiny-trains-film.md b/.changeset/tiny-trains-film.md
new file mode 100644
index 000000000..812ef31b0
--- /dev/null
+++ b/.changeset/tiny-trains-film.md
@@ -0,0 +1,5 @@
+---
+"app-avatax": patch
+---
+
+Added TransactionAlreadyCancelled support for AvaTax app while canceling Saleor order.
diff --git a/apps/avatax/src/modules/avatax/avatax-errors-parser.ts b/apps/avatax/src/modules/avatax/avatax-errors-parser.ts
index 52e7c297d..907c3651d 100644
--- a/apps/avatax/src/modules/avatax/avatax-errors-parser.ts
+++ b/apps/avatax/src/modules/avatax/avatax-errors-parser.ts
@@ -8,6 +8,7 @@ import {
   AvataxInvalidAddressError,
   AvataxInvalidCredentialsError,
   AvataxStringLengthError,
+  AvataxTransactionAlreadyCancelledError,
 } from "../taxes/tax-error";
 import { assertUnreachableWithoutThrow } from "../utils/assert-unreachable";
 import { normalizeAvaTaxError } from "./avatax-error-normalizer";
@@ -23,6 +24,7 @@ export class AvataxErrorsParser {
       "AuthenticationException",
       "StringLengthError",
       "EntityNotFoundError",
+      "TransactionAlreadyCancelled",
     ]),
     details: z.array(
       z.object({
@@ -74,6 +76,13 @@ export class AvataxErrorsParser {
           },
         });
       }
+      case "TransactionAlreadyCancelled": {
+        return new AvataxTransactionAlreadyCancelledError(parsedError.data.code, {
+          props: {
+            description: parsedError.data.details[0].description,
+          },
+        });
+      }
       default: {
         assertUnreachableWithoutThrow(parsedError.data.code);
         return normalizeAvaTaxError(err);
diff --git a/apps/avatax/src/modules/taxes/tax-error.ts b/apps/avatax/src/modules/taxes/tax-error.ts
index eb6116678..88dfbe878 100644
--- a/apps/avatax/src/modules/taxes/tax-error.ts
+++ b/apps/avatax/src/modules/taxes/tax-error.ts
@@ -44,3 +44,12 @@ export const AvataxEntityNotFoundError = ExpectedError.subclass("AvataxEntityNot
     description: "",
   },
 });
+
+export const AvataxTransactionAlreadyCancelledError = ExpectedError.subclass(
+  "AvataxTransactionAlreadyCancelledError",
+  {
+    props: {
+      description: "",
+    },
+  },
+);
diff --git a/apps/avatax/src/pages/api/webhooks/order-cancelled.ts b/apps/avatax/src/pages/api/webhooks/order-cancelled.ts
index ce7f83dce..e419409f7 100644
--- a/apps/avatax/src/pages/api/webhooks/order-cancelled.ts
+++ b/apps/avatax/src/pages/api/webhooks/order-cancelled.ts
@@ -7,6 +7,7 @@ import { captureException } from "@sentry/nextjs";
 import { AvataxOrderCancelledAdapter } from "@/modules/avatax/order-cancelled/avatax-order-cancelled-adapter";
 import { ClientLogStoreRequest } from "@/modules/client-logs/client-log";
 import { LogWriterFactory } from "@/modules/client-logs/log-writer-factory";
+import { AvataxTransactionAlreadyCancelledError } from "@/modules/taxes/tax-error";
 
 import { AppConfigExtractor } from "../../../lib/app-config-extractor";
 import { AppConfigurationLogger } from "../../../lib/app-configuration-logger";
@@ -228,6 +229,16 @@ export default wrapWithLoggerContext(
               });
             }
 
+            if (e instanceof AvataxTransactionAlreadyCancelledError) {
+              logger.warn("Transaction was already cancelled in AvaTax. Responding 200", {
+                error: e,
+              });
+
+              return res.status(200).send({
+                message: "Transaction was already cancelled in AvaTax",
+              });
+            }
+
             ClientLogStoreRequest.create({
               level: "error",
               message: "Failed to void order. AvaTax returned error.",