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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:

  • Keep your customers' exemption certificates in one place
  • Automatically exempt purchases from tax when appropriate
  • Send mail or email campaigns to ask your customers for certificates, and then use Campaign Insights to track their progress.

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

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 Exemption

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

Add your exempt customers and their exemption information under Exemptions.

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 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 exemption certificate number

  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

Create custom entity/use codes

AvaTax Update for Microsoft Dynamics NAV comes with predefined entity/use codes. Create your own custom 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.

Exempt customers from sales tax with an entity/use code

  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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