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Exemption Reason Matrices for US and Canada (Entity/Use Code List)

This article applies to:Avalara AvaTax

List of available entity use codesHoverTT.png that you can use to apply exemptions in AvaTax. The matrices show states and countries by business type and exemption reason. Exemption reasons are different based on the country and state level.

List of entity/use codes

Entity/use codes are represented by the letters to exempt specific business entities. For example, entity/use code A applied to a customer would mean they are exempt because the customer is Federal Government.

Entity/use code Exemption reason Restrictions and considerations
A Federal government US only
B State government  
C Tribal government  
D Foreign diplomat  
E Charitable organization  
F Religious or educational organization  
G Resale  
H Agricultural production  
I Industrial production or manufacturers The use of Avalara tax codes PM020704 and PM020700 with entity/use code I in Alabama, California, Louisiana, and Mississippi produces state-mandated reduced rates for manufacturers, rather than a full exemption. In states where no such exemption or reduced rate is available for items assigned these codes, entity/use code I may produce a fully taxable result.
J Direct pay permit  
K Direct mail  
L Other or custom  
N Local government US only
P Commercial aquaculture Canada only
Q Commercial fishery Canada only
R Non-resident Canada only
TAXABLE   Using TAXABLE as the entity/use code forces a typically exempt customer to be taxed. This is how you can make an exemption certificateHoverTT.png in CertCapture or ECMS not apply to a sale.

US business type – Exemption reason matrix

Valid entries for the business type and its exemption reason are indicated below. The exemption reason maps to the entity/use codes listed above.

  A B C D E F G H I J K L N
Accommodations and food services             Y     Y Y Y  
Agricultural forestry, fishing and hunting             Y Y   Y Y Y  
Construction             Y     Y Y Y  
Finance and Insurance             Y   Y Y Y Y  
Information, publishing and communication             Y   Y Y Y Y  
Manufacturing             Y   Y Y Y Y  
Mining             Y   Y Y Y Y  
Real estate             Y     Y Y Y  
Rental and leasing             Y     Y Y Y  
Retail trade             Y     Y Y Y  
Transportation and warehousing             Y     Y Y Y  
Utilities   Y         Y   Y Y Y Y  
Wholesale trade             Y     Y Y Y  
Business services             Y     Y Y Y  
Professional services             Y     Y Y Y  
Education and healthcare services   Y     Y Y Y         Y  
Nonprofit organization         Y Y           Y  
Government Y Y Y Y       Y       Y Y
Not a business                     Y Y  
Other             Y     Y Y Y  

States and Territories - Exemption reason matrix

Exemption reasons differ from state to state. Valid entries for the business type and its exemption reason are indicated below.

T = Taxable (non-exempt)

E = Exempt (non-taxable)

P = Partially taxable

N = No entity exemptions allowed

* = Some locals taxable

  A B C D E F G H I J K L N
Alabama E E E E E E E P E E E E E
Alaska N N N N N N N N N N N N N
Arizona E T T E E E E E E E E E T
Arkansas E T E E T T E E E E E E T
California E T E E T T E P P E E E T
Colorado E E E E E E E E* E* E E E E
Connecticut E E E E E E E E E E E E E
D.C. E E T E E E E T T T E E E
Delaware N N N N N N N N N N N N N
Florida E E E E E E E E E E E E E
Georgia E E T E T T E E E E E E E
Hawaii E T T E T T P T P T T T T
Idaho E E E E E E E E E E E E E
Illinois E E T E E E E E E E E E E
Indiana E E T E E E E E E E E E E
Iowa E E E E E E E E E E E E E
Kansas E E E E E E E E E E E E E
Kentucky E E T E E E E E E E E E E
Louisiana E E E E E E E E E E E E E
Maine E E E E E E E E E E E E E
Maryland E E T E E E E E E E E E E
Massachusetts E E E E E E E E E E E E E
Michigan E E E E E E E E E E E E E
Minnesota E E E E E E E E E E E E E
Mississippi E E E E E E E E T E E E E
Missouri E E T E E E E E E* E E E E
Montana N N N N N N N N N N N N N
Nebraska E E E E E E E E E E E E E
Nevada E E E E E E E E T E E E E
New Hampshire N N N N N N N N N N N N N
New Jersey E E T E E E E E E E E E E
New Mexico E E E E E E E E T E E E E
New York E E E E E E E E E E E E E
North Carolina E E E E T T E E E E E E T
North Dakota E E E E E E E P E E E E E
Ohio E E T E E E E E E E E E E
Oklahoma E E E E E E E E E E E E E
Oregon N N N N N N N N N N N N N
Pennsylvania E E T E E E E E E E E E E
Puerto Rico E E E E E E T E E E E E E
Rhode Island E E E E E E E E E E E E E
South Carolina E T E E E T E E E E E E T
South Dakota E E E E T E E E T E E E E
Tennessee E E E E E E E E E E E E E
Texas E E E E E E E E E E E E E
Utah E E E E E E E E E E E E E
Vermont E E T E E E E E E E E E E
Virginia E E T E E E E E E E E E E
Washington E T E E T T E E E E E E T
West Virginia E E T E E E E E E E E E E
Wisconsin E E E E E E E E E E E E E
Wyoming E E E E E E E E E E E E E

Canadian province - Exemption reason matrix

Exemption reasons differ from province to province. Valid entries for the business type and its exemption reason are indicated below.

T = Taxable (non-exempt)

G = GST taxable only

E = Exempt (non-taxable)

N = No entity exemptions allowed

  A B C D E F G H I J K L N P Q R
Canada T E E T T T T T T T T T T T T T
Alberta N N N N N N N N N N N N N N N N
British Columbia G T E T T T G G G T T G T G G G
Manitoba T T E G T T G G T T T T T G G T
New Brunswick T T E T T T T T T T T T T T T T
Newfoundland and Labrador T E E T T T T T T T T T T T T T
Northwest Territories N N N N N N N N N N N N N N N N
Nova Scotia T E E T T T T T T T T T T T T T
Nunavut N N N N N N N N N N N N N N N N
Ontario T E E T T T T T T T T T T T T T
Prince Edward Island T T E T T T T T T T T T T T T T
Quebec T T E T T T T T T T T T T T T T
Saskatchewan G T E G T T G G G T T G T G T G
Yukon Territory N N N N N N N N N N N N N N N N