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Who You Exempt

An exemption certificate number identifies a buyer as exempt. If you regularly sell to tax-exempt customers, you need to consistently exempt their purchases. You also need copies of all of your customers' exemption certificates in case of an audit. There's more than one way to do both:

  • If you already have a method to store exemption certificates, send customers' exemption certificate numbers to AvaTax Update using your accounting software, or send entity/use codes that explain why the customer should be exempt.
  • If you don't already have a way to store certificates, use AvaTax Exemption or CertCapture, depending on your needs:
    • To exempt buyers and store their exemption certificates, use AvaTax Exemption.
    • 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.

Use CertCapture

CertCapture manages exemption certificates and other compliance documents. Use it with or without AvaTax Update. Use CertCapture to:

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 your accounting software

Add a customer's exemption certificate to CertCapture by adding a customer record to CertCapture.

To add a customer record to CertCapture from Microsoft Dynamics GP:

  1. Go to Cards > Sales > Customer.
  2. In the Customer Maintenance window, click Address.
  3. In the Customer Address Maintenance window, click Additional, and then click CertCapture Create Customer.
  4. In the Create Customer Record window:
    1. Type the required details for your customer, and then, to validate the address, click Validate.
    2. Click Send, and then, when the success message displays, click OK.

Use AvaTax Exemption

AvaTax Exemption is included with AvaTax Update. Use it to:

  • Store up to 25 of your customers' exemption documents in one place, free. Upgrade to CertCapture if you need to store more than 25 documents
  • Exempt purchases from tax by associating exemption information with your customer's AvaTax Update record

If you haven't set up AvaTax Exemption on your account, click Exemptions and then click Create Customer Exemptions to get started.

When you're ready, import your exempt customers using a template or adjust your settings to require exemption certificates

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 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 uses what they purchase

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

Exempt customers from sales tax with an entity/use code

To assign an entity/use code to a customer in Microsoft Dynamics GP:

  1. Go to Cards > Sales > Customer.
  2. In the Customer Maintenance dialog box, click Address ID.
  3. In the Customer Address Maintenance dialog box, click Additional, and then click AvaTax Entity/Use Code.
  4. In the AvaTax Entity/Use Code dialog box, click Search .
  5. In the AvaTax Entity Code Lookup dialog box, select entity/use codes, click Select, and then click Save.
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