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Who You Exempt

If you regularly sell to customers who're exempt from tax, you need to store their exemption certificates and consistently exempt their purchases. There's more than one way to exempt customers:

  • If you already have a method to store exemption certificates, send AvaTax Update your customers' exemption certificate numbers using your accounting software, or send us entity/use codes that explain why the customer should be exempt.
  • If you don't have a way to store certificates, use AvaTax Exemptions or CertCapture, depending on your needs:
    • To exempt buyers and store their exemption certificates, use AvaTax Exemptions.
    • To exempt customers, and to request, generate, and store exemption certificates, use CertCapture.
You can exempt customers, but that doesn't mean you're compliant. You need valid documentation of your buyer's exemption certificate to support tax exemptions in case of an audit. Valid documentation includes copies of valid exemption certificates and the associated invoices. If you exempt customers from tax with exemption numbers or entity/use codes, keep organized records for all exempt purchases. Exemption Certificate Example - Thumb.png

Use CertCapture

CertCapture manages exemption certificates and other compliance documents. It can be used with or without AvaTax Update. Use CertCapture to:

  • Send mail or email campaigns to ask your customers for certificates
  • Keep your customers' exemption certificates in one place, so you're ready for audits
  • Connect CertCapture to AvaTax Update to automatically exempt purchases from tax when appropriate

CertCapture stores exemption information and official copies of exemption certificates for each customer. With CertCapture, you always have an organized, audit-ready database of exemption certificates.

If you're not using CertCapture to manage exemption certificates, contact your Customer Account Manager (CAM) for more information.

Add a customer record to CertCapture from Microsoft Dynamics NAV

To add a customer record to CertCapture from Microsoft Dynamics NAV, follow these steps:

  1. Go to Departments > Sales and Marketing > Order Processing > Customers.
  2. In the Customers window, go to Navigate > CertCapture > Add customer to CertCapture.
  3. In the Add Customer: Customer Card window:
    1. Add the relevant details. Ensure that you add the address details and the email address. 

      DNAV_AvaCert01.png

    2. Click Validate Address  to ensure the address is formatted correctly.
    3. Click Add Customer. The message "Customer successfully created" is shown. Click OK.
    4. In the Add Customer: Customer Card window, click OK.

Request an exemption certificate

Once a customer is added to Microsoft Dynamics NAV, request an exemption certificate from them.

  1. Go to Departments > Sales and Marketing > Order Processing > Customers.
  2. In the Customers window, select a customer and then click CertCapture > Request exemption certificate.
  3. In the Request exemption certificate: Customer Card window:
    1. To choose how to send a certificate request to a customer, select the Communication mode. Click the link in the communication and complete the exemption certificate request process. 
    2. Click Request exemption certificate. A message displays on the screen and an email notification is sent to you when the request is placed in CertCapture. Click OK.

      DNAV_AvaCert04.png

  4. To check the status of your certificate request, click CertCapture > Retrieve certificate(s) status. In the View - Certificate Status window, you can review a list of exemption certificates and their request status. Once a customer's exemption certificate is in the system, they're exempt from sales tax. Click Close.

    DNAV_AvaCert05.png

    The Request stage can be either of the following options:

    The Request Status can be Open or Closed.

    • REQUESTINITIATED:  You've sent the email, fax, or letter to the customer.
    • CUSTOMERRESPONDED: The customer has received an exemption certificate request and has responded to it by entering the wizard, but they haven't faxes the certificate. . 
    • CERTIFICATERECEIVED:  The customer has faxed the certificate to CertCapture.
  5. To retrieve the certificate, go to Navigate > CertCapture > Retrieve certificate(s).
  6. In the Edit - Certificate Details window:

    DNAV_AvaCert06.png

    1. On the Certificate Details tab, select the certificate.   
    2. To download the certificate, click the following buttons and follow the steps in your computer for downloading a document.
      • To download the certificate in .png format, click Get Certificate as PNG.
      • To download the certificate in .pdf format, click Get Certificate as PDF.

Use AvaTax Exemptions

AvaTax Exemptions is included with AvaTax Update. To exempt a transaction from tax using AvaTax Exemptions, enter information from your customer's exemption certificate into AvaTax Update. AvaTax Exemptions stores the information with your customer's AvaTax Update record, so their future transactions are exempt.

You need copies of all of your customers' exemption certificates in case of an audit. AvaTax Exemptions allows you to store up to 25 exemption documents for free. You can upgrade AvaTax Exemptions if you need to store more than 25 documents.

Add your exempt customers and their exemption information under Settings > Manage your exempt customers.

To optimize compliance, require an exemption certificate for exempt customers in AvaTax Update under Settings > Manage advanced account settings.

Use exemption certificate numbers or entity/use codes

An exemption certificate number identifies a buyer as exempt. To exempt a customer, enter the buyer's exemption number on the invoice when making a sale.

AvaTax Update uses an entity/use code to exempt a customer from tax. An entity/use code works in two ways:

  • The code flags a transaction with a reason for the exemption based on the entity that's buying
  • The code flags a transaction based on how the buyer will use what they purchase

Entity/use codes are applied based on government laws. Use your accounting software to assign entity/use codes to your transactions.

Use an exemption certificate number in Microsoft Dynamics NAV

  1. In Microsoft Dynamics NAV, go to Departments > Sales & Marketing, and then click Sales.
  2. Go to Lists > Customers.
  3. Select a customer.
  4. In the Edit - Customer Card window, go to Invoicing, type Exemption Certificate Number in Tax Exemption No, and then click OK.

    NAV_FlagCustomerExempt1.png

Add entity/use codes

You can add to or edit the existing list of entity/use codes HoverTT.png.

  1. In Microsoft Dynamics NAV, go to AvaTax > Setup.
  2. Go to Administration, and then click Entity/Use Code.
  3. In the Edit - Entity/Use Code Mapping window:
    • To add a new entity/use code, click New. 
    • To change the list of entity/use codes that come with AvaTax Update, click Edit.  
    • To restore the default list of entity/use codes that come with AvaTax Update, click Restore default values.

Map entity/use codes to customers

  1. In Microsoft Dynamics NAV, go to Utilities > Administration and click Entity/Use Code Mapping.
  2. In the Edit - Entity Use Code Mapping dialog box, under Entity Use Code, select an entity use code, and then click OK.

    NAV2013_EditEntityUserCode2.png
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