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Exempt Customers from Tax

This article applies to:Avalara AvaTax for NetSuite

There are four ways to exempt your customers from tax.

  • Use CertCapture
  • Use an exemption certificate number
  • Use an entity/use code in NetSuite
  • Use the Taxable checkbox in NetSuite

Use CertCapture

Request exemption certificates from CertCapture in NetSuite. To request an exemption certificate:

  1. Configure CertCapture in AvaTax
  2. Add a customer to CertCapture
  3. Request an exemption certificate

For more information about all things CertCapture, visit the guide.

Configure CertCapture in AvaTax

To configure CertCapture for an AvaTax account, follow these steps:

  1. In AvaTax, go to the Organization tab, and then select a company.
  2. On the Company page, click the Exemptions tab.

    NS_Cetcapture2.png

  3. On the Exemptions tab, click AvaTax Certs Company Settings.

    NS_Cetcapture3.png

  4. In the Edit: AvaTax Certs Company Settings window, type your AvaTax Certs Client Code and AvaTax Certs Org Code. Set the AvaTax Certs Status as Enabled and click Save.

    NS_Cetcapture4.png

Add a customer record to CertCapture from NetSuite

To add a customer record to CertCapture from NetSuite, follow these steps:

  1. In NetSuite, go to Lists > Relationships > Customers, and then click New Customer.
  2. On the Customer page, type the required details, and then click Save. A message displays after the customer record is added.
  3. On the Customer page:
    1. To add address details and an email address, click Edit.
    2. Click the Address tab and add or select the address for which you want to generate the exemption certificate.

      NS_Cetcapture8.png

    3. Click Add Customer to CertCaptureCertCapture. A message displays when the customer is added to CertCapture.

      NS_Cetcapture9.png

Request an exemption certificate

To request an exemption certificate from a customer in CertCapture from NetSuite, follow these steps:

  1. In NetSuite, go to Lists > Relationships > Customers, and then click Edit next to the customer from whom you'd like to request an exemption certificate.
  2. On the Customer page, click the Address tab:
    1. Under Communication Mode, choose Email, and then 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.

      NS_Cetcapture10.png

      Email notification:

      NS_Cetcapture11.png

    2. To check the status of your certificate request, click Retrieve Certificate Status. The current stage of the request, displayed under Request Stage, shows "Request Initiated".

      NS_Cetcapture12.png

      The Request Stage can be one of the following options:

      • Request Initiated: You've sent the email, fax, or letter to the customer

      • Customer Responded: The customer has received an exemption certificate request and has responded to it by entering the wizard, but they haven't faxed the certificate

      • Certificate Received: The customer has faxed the certificate to CertCapture

      The Request Status can be Open or Closed.

    3. Click Email to generate the exemption certificate. Once the Request Stage shows "Customer Responded," proceed with the next step.

      NS_Cetcapture13.png

    4. Click Email again to complete the generation of the exemption certificate.
    5. Click Retrieve Certificate(s) Status. Once the certificate is complete, the Request Stage shows "Certificate Received."

      NS_Cetcapture14.png

    6. Click Retrieve Certificate. Select the exemption certificate, and then click Get Certificate. Download the exemption certificate in either .PNG or .PDF format.

      NS_Cetcapture15.png

Use an exemption certificate number

To exempt your customer from sales tax using your customer's tax registration number, called the Exemption Certificate No. in NetSuite, follow these steps:

Use an exemption certificate number in NetSuite

  1. In NetSuite, go to Lists > Relationships > Customers, and then click Edit next to the customer for whom you'd like to add an exemption certificate number.
  2. Go to the AvaTax tab and type the Exemption Certificate No.

    NS_ExemptionNo.png

  3. Click Save.

Use entity/use codes in NetSuite

Entity/use codesHoverTT.png are custom values that group similar customers for exemption purposes and link them to tax rules. AvaTax for NetSuite creates default entity/use codes automatically when it's installed. To apply entity/use codesHoverTT.png in AvaTax for NetSuite, map entity/use codes to customers or transactions. For more information about available entity/use codes, see exemption reason matrices.

Create an entity/use code

To create an entity/use code, follow these steps:

  1. In NetSuite, go to Avalara > Setup > Entity/Use Code.
  2. On the Entity/Use Code List page, click New.
  3. On the Entity/Use Code page, follow these steps:
    • Under ENTITY/USE CODE ID, type the entity/use code (typically one letter).
    • Under DESCRIPTION, type a description for the entity/use code.
  4. At the upper left, click Save.

Map an entity/use code to a customer

  1. In NetSuite, go to Lists > Relationships > Customers, and click Edit next to the customer to whom you'd like to map an entity/use code.
  2. On the Customer page, click the Address tab.
  3. Select an Entity/Use Code from the drop-down menu. If none exist, create a new one.
  4. Click Save.
    NetSuite2014_MapEntityUse2.png

Use a taxable checkbox

Use the Taxable checkbox in NetSuite to flag a customer as taxable. If you clear this checkbox, the customer is flagged as exempt from tax.

Flag customer as exempt in NetSuite

In AvaTax for NetSuite, configure tax calculations for a sales transaction that have the taxability at the header-level: 

  1. Go to Setup > Accounting > Set up Taxes. Click on United States and ensure that Per-Line Taxes on Transactions isn't enabled. If this option is enabled, the accounting tab isn't visible.

  2. In NetSuite, go to Transactions > Sales, and click Create Invoices.
  3. On the Invoice page:
    1. Select the Custom Form as Standard Product Invoice.
    2. Go to the Accounting tab and deselect Taxable. If this field isn't selected, then the customer is exempted from tax