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ECMS and Streamlined Sales Tax (SST) Clients

This article applies to:Avalara AvaTax

ECMSHoverTT.png is initially disabled for most AvaTax accounts. One exception is for customers who are participating in the Streamlined Sales Tax Project (SSTP)HoverTT.png and using Avalara as their Certified Service Provider (CSP). For these customers, the use of ECMS is required for SST companies.

For more information, read our ECMS - frequently asked questions.

ECMS and SST Clients

ECMS must be enabled for the AvaTax account before using it to:

  • Manage exemption certificate entries created in AvaTax
  • View exemption certificate entries updated from Certs

Using ECMS is optional for:

  • Customers not participating in the SSTP
  • Customers participating in the SSTP and using Avalara as their CSP for non-SST states

Two types of customer-related exemption certificate entries can be recorded:

  • Entity: The exemption is based on the type of business activity
  • Use: The exemption is based on how a product or service is used

Apply an exemption certificate entry once it is recorded:

  • AvaTax automatically applies exemption certificate entries when processing transactions

Report on exemption certificate entries:

Notes:

  • Transactions without exemption certificate entries are taxed. SST subscribers have until the 8th of the following month to enter the exemption data and re-process the transaction before liability worksheets are locked on the 10th of the month. After the 10th, customers may engage the Avalara Compliance Department to amend returns or apply the credit to the next month’s return.
  • The Sales Tax/Reconcile Reports/ECMS Exemption Exposure Report and the Sales Tax/Reconcile Reports/ECMS Exemption Exposure Aging Report both let SST Companies see their exemption exposure in SST states in various ways.
  • SST states require the use of the business type and the exemption reason in an exemption certificate entry. Either of these set to Other requires the use of the corresponding description.

CSP Customers

CSP customers must make the SST/Non-SST decision for all companies. The choices on the exemption certificate options screen enforce requirements for exemption certificatesHoverTT.png for all exempt transactionsHoverTT.png in SST Companies for SST states.

For CSP AvaTax accounts, the choice for SST transactions (SST states within SST Companies) will be set to Required. Choices for Non–SST transactions (non-SST companies or non-SST transactions for SST companies) can be chosen as desired for the AvaTax account.

Choosing an exemption certificate entry processing option is unavailable for SST customers, as this choice is required.

  1. The check box for Enable Exemption Certificate Management System (ECMS) is selected for CSP AvaTax accounts.
  2. The ECMS option for SST is set to Required.

    AvaTaxCalc-Settings-ECMSOptionFieldsSSTEnable.png
  3. Choose an option for processing exemption certificate entries for the United States and for Canada for Non-SST:
    • Ignored
      • Exemption certificate entries are ignored and not applied to transactions. Instead, AvaTax exempts a customer based on the exemption number or entity use code passed from the accounting, ERP, e-commerce, m-commerce, or POS application. Use this option while migrating to ECMS or Certs. Gather and record all customer exemption certificates before choosing Optional or Required to exempt customers.
    • Optional
      • Exemption certificate entries are optionally applied to transactions. If an exemption certificate entry is found, AvaTax exempts a customer based on the exemption certificate entry. If no exemption certificate entry is found, AvaTax exempts a customer based on the exemption number or entity use code passed from the accounting, ERP, e-commerce, m-commerce, or POS application.
    • Required (default)
      • Exemption certificate entries are always applied to transactions. Exemption numbers or entity use codes passed from the accounting, ERP, e-commerce, m-commerce, or POS application are ignored. Required is the default option as it is "best practice" to require exemption certificate data for exempt transactions.

        AvaTaxCalc-Settings-ECMSOptionFieldsSSTCountries.png
  4. If desired, change the Exemption Override Code which identifies transactions from a normally exempt customer as taxable. The default code is Taxable.

    AvaTaxCalc-Settings-ECMSOptionFieldsSSTTaxable.png
  5. Click Save.

Notes:

Once enabled, ECMS can be used by each company in an AvaTax account.

When ECMS is enabled, the Exemptions column displays on the Organization tab.

Non-CSP Customers

Non-CSP customers have the option of enabling ECMS and deciding how exemption certificates are processed.

  1. Select the check box for Enable Exemption Certificate Management System (ECMS).

    AvaTaxCalc-Settings-ECMSOptionFieldsNonSSTEnable.png
  2. Choose an option for processing exemption certificate entries for the United States and for Canada:
    • Ignored
      • Exemption certificate entries are ignored and not applied to transactions. Instead, AvaTax exempts a customer based on the exemption number or entity use code passed from the accounting, ERP, e-commerce, m-commerce, or POS application. Use this option while migrating to ECMS or Certs. Gather and record all customer exemption certificates before choosing Optional or Required to exempt customers.
    • Optional
      • Exemption certificate entries are optionally applied to transactions. If an exemption certificate entry is found, AvaTax exempts a customer based on the exemption certificate entry. If no exemption certificate entry is found, AvaTax exempts a customer based on the exemption number or entity use code passed from the accounting, ERP, e-commerce, m-commerce, or POS application.
    • Required (default)
      • Exemption certificate entries are always applied to transactions. Exemption numbers or entity use codes passed from the accounting, ERP, e-commerce, m-commerce, or POS application are ignored. Required is the default option as it is best practice to require exemption certificate data for exempt transactions.

        AvaTaxCalc-Settings-ECMSOptionFieldsNonSSTCountries.png
  3. If desired, change the Exemption Override Code which identifies transactions from a normally exempt customer as taxable. The default code is Taxable.

    AvaTaxCalc-Settings-ECMSOptionFieldsNonSSTTaxable.png
  4. Click Save.

Notes:

Once enabled, ECMS can be used by each company in an AvaTax account.

When ECMS is enabled, the Exemptions column displays on the Organization tab.


 

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