In CertCapture, you may say see customer exempt reasons beginning in EXPOSURE or NON-NEXUS for exemption certificates that are missing, invalid, or expired. Continue reading to learn if you need to do anything when you see these exempt reasons.
EXPOSURE exempt reasons
If you sell to a tax-exempt customer but do not have a copy of the customer's exemption certificates on file, there is potential risk and exposure in event of an audit. When a certificate is missing, invalid, or expired, CertCapture alerts you of this potential exposure by displaying EXPOSURE at the beginning of the exempt reason. When you see this, consider requesting updated documents from the customer.
NON-NEXUS exempt reasons
Part of the CertCapture account setup process is telling CertCapture where you're registered to collect and remit tax by adjusting your nexus settings. Nexus is the connection a business has with a taxing jurisdiction which obligates the business to calculate, collect, report, and remit tax. The connection is established by virtue of the business activity conducted in the taxing jurisdiction. State and local authorities have varying definitions as to what constitutes nexus and who is liable for collecting and remitting sales and use taxes in their jurisdictions.
The NON-NEXUS exempt reasons are displayed for missing, invalid, or expired certificates in regions where you do not have nexus enabled. This indicates that you may not need to collect exemption certificates for the region, since you're not registered to collect tax in the region. If you are registered to collect tax in the region, consider adjusting your nexus settings to add the region. This changes the exempt reason to an EXPOSURE exempt reason, so you may want to request updated documents from your customer.
EXPOSURE: NON-DELIVERABLE exempt reason
When you see EXPOSURE: NON-DELIVERABLE in the Exempt Reason for a customer in CertCapture it means that the customer address or contact information is missing. To resolve this:
- Navigate to the customer Details tab.
- Select Edit.
- Enter the customer's contact information and a complete address.
- Select Update Customer.
The exempt reason should now show as 'EXPOSURE: MISSING CERT. Learn how to request documents from customers. If you see the EXPOSURE: NON-DELIVERABLE exempt reason on an exemption certificate, you will need to edit the certificate to select a different exempt reason.