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Exemption Reason Matrix for US or Canada (Entity/Use Code List)

This article applies to:Avalara AvaTax

Use entity use codesHoverTT.png to apply exemptions in AvaTax. States and countries are organized by business type and exemption reason. Exemption reasons differ based on the country and state.

List of entity/use codes

Entity/use codes exempt specific business entities, and are represented by a letter. For example, entity/use code A applied to a customer indicates 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 organization

Effective January 1, 2018, the Streamlined Sales Tax Project (SSTP) split educational and religious organizations into two separate categories. Previously, Entity/Use Code F represented both religious and educational organizations. This change will be effective within Avalara products on April 1, 2018.

Review instructions for updating your exemption reasons in AvaTax.

Review instructions for updating your exemption reasons in CertCapture.

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  
M Educational organization

Effective January 1, 2018, the Streamlined Sales Tax Project (SSTP) split educational and religious organizations into two separate categories. Previously, Entity/Use Code F represented both religious and educational organizations. This change will be effective within Avalara products on April 1, 2018.

Review instructions for updating your exemption reasons in AvaTax.

Review instructions for updating your exemption reasons in CertCapture.

N Local government US only
P Commercial aquaculture Canada only
Q Commercial fishery Canada only
R Non-resident

Canada only

For use by Canadian registrants receiving a Drop-Shipment Certificate from a registered cosignee pursuant to Subsection 179(2) of the Excise Tax Act.

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.

The letter columns correspond to the reasons described earlier in this article. Hover over a letter to see its reason name.

  A B C D E F G H I J K L M 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 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. The letter columns correspond to the exemption reasons described in the first table in this article.

T = Taxable (non-exempt)

E = Exempt (non-taxable)

P = Partially taxable

N = No entity exemptions allowed

* = Some locales taxable

T# = Exempt if purchase is $1,000 or greater

  A B C D E F G H I J K L M N
Alabama E E E E E T E P E E E E E E
Alaska N N N N N N N N N N N N N N
Arizona E T T E E T E E E E E E T T
Arkansas E T E E T T E E E E E E T T
California E T E E T T E P P E E E T T
Colorado E 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 E
D.C. E E T E E E E T T T E E E E
Delaware N 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 E
Georgia E E T E T T E E E E E E T E
Hawaii E T T E T T P T P T T T T T
Idaho E E E E E T E E E E E E E E
Illinois E E T E E E E E E E E E E E
Indiana E E T E E E E E E E E E E E
Iowa E E E E E T E E E E E E E E
Kansas E 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 E
Louisiana E E E E E T E E E E E E E E
Maine E 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 E
Massachusetts E 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 E
Minnesota E E E E E E E E E E E E E E
Mississippi E E E E E T E E T E E E E E
Missouri E E T E E E E E E E E E E E
Montana N 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 E
Nevada E E E E E E E E T E E E E E
New Hampshire N 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 E
New Mexico E E E E E E E E T T E E E E
New York E 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 T
North Dakota E E E E E T E P E E E E E E
Ohio E E T E E E E E E E E E E E
Oklahoma E 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 N
Pennsylvania E E T E E E E E E E E E E E
Puerto Rico E E E E E T T E E E E E E E
Rhode Island E 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 T
South Dakota E E E E T T E E T E E E E E
Tennessee E 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 E
Utah E E E E E T# E E E E E E T# E
Vermont E E T E E E E E E E E E E E
Virginia E E T E E E E E E E E E E E
Washington E T E E T T E E E E E E T T
West Virginia E E T E E E E E E E E E E E
Wisconsin E 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 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. The letter columns correspond to the exemption reasons described in the first table in this article.

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 M N P Q R
Canada T E E T 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 E N N N N
British Columbia G T E T T T G G G T T G T T G G G
Manitoba T T E G T T G G T 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 T
Newfoundland and Labrador T E E T 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 E N N N N
Nova Scotia T E E T T T T T T T T T T T T T T
Nunavut N N N N N E N N N N N N E N N N N
Ontario T E E T 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 T
Quebec T T E T 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 T G T G
Yukon Territory N N N N N E N N N N N N E N N N N
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