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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

AvaTax for NetSuite lets you request exemption certificates from CertCapture. To request an exemption certificate:

  1. Configure CertCapture.
  2. Create a customer in CertCapture.
  3. Request an exemption certificate.

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

Configure CertCapture

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

  1. Log in to the Admin Console, click the Organization tab and click the company name.

    NS_ certcapture1.png

  2. On the Company page, click the Exemptions tab.

    NS_Cetcapture2.png

  3. In 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

Create a customer in CertCapture

To create a customer in CertCapture, follow these steps:

  1. In NetSuite, go to Lists > Relationships > Customers and click New Customer.

    NS_Cetcapture5.png

  2. On the Customer page, type all the required details and click Save. A message is displayed after the customer record is successfully created.

    NS_Cetcapture6.png

  3. On the Customer page:
    1. To add the address details and the email address, click Edit.
    2. Click the Address tab and add/select the address for which you want to generate the exemption certificate from CertCapture.

      NS_Cetcapture8.png

    3. Click Add Customer to CertCapture. A message is displayed if the customer is successfully created in CertCapture.

      NS_Cetcapture9.png

Request an exemption certificate

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

  1. In NetSuite, go to Lists > Relationships > Customers and select the customer.
  2. On the Customer page:
    1. Select the Communication Mode as Email and then click Request Exemption Certificate. A message is displayed on the screen and an email notification is sent to you if the request is successfully placed in CertCapture.

      Message:

      NS_Cetcapture10.png

      Email notification:

      NS_Cetcapture11.png

    2. To check the certificate retrieval status, click Retrieve Certificate Status. The request status, displayed in Request Stage, shows "Request Initiated".

      NS_Cetcapture12.png

      The Request stage can be either of the following options:

      • REQUESTINITIATED means that you have sent the email, fax, or letter to the customer.

      • CUSTOMERRESPONDED means that the customer has received an exemption certificate request and has responded to it by entering the wizard, but hasn’t yet faxed the certificate.

      • CERTIFICATERECEIVED means that the customer has faxed the certificate to CertCapture.

      The Request Status can be Open or Closed.

    3. Click Email to generate the exemption certificate. The request status, displayed in Request Stage, shows '"Customer Responded".

      NS_Cetcapture13.png

    4. Click Email again to complete the generation of the exemption certificate.

       

    5. Click Retrieve Certificate(s) Status. The request status, displayed in Request Stage, shows "Certificate Received".

      NS_Cetcapture14.png

    6. Click Retrieve Certificate. Select the exemption certificate and then click Get Certificate. You can download the exemption certificate in either .PNG format or .PDF format.

       

      NS_Cetcapture15.png

      The exemption certificate format:

      NS_Cetcapture17.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 NetSuite

  1. In NetSuite, go to Lists > Relationships and click Customers.
  2. On the Customers page, select the customer and click Edit.
  3. Go to the AvaTax tab and type the Exemption Certificate No..

    NS_ExemptionNo.png

  4. 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. An installation AvaTax for NetSuite creates default entity / use codes automatically. To apply entity/use codesHoverTT.png in AvaTax for NetSuite,  map that entity/use code to a customer or a transaction. You  can also add/update the entity/use code in NetSuite. 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. On the NetSuite tool bar, on the Avalara menu, point to Setup and then click Entity/Use Code.
  2. On the Entity/Use Code List page, at the upper left, click New.
    NetSuite2014_AddEntityUseCode1.png
  3. On the Entity/Use Code page, follow the steps:
    • Under ENTITY/USE CODE ID type the entity/use code, which is typically one letter.
    • Under DESCRIPTION, type a description for the entity/use code, if you wish.
  4. At the upper left, click Save.
    NetSuite2014_AddEntityUseCode4.png

Map an entity/use code to a customer

  1. On the NetSuite toolbar, on the Lists menu, point to Relationships, and then click Customers.
  2. In the Customers pane, next to a customer name, click Edit.
    NetSuite2014_MapEntityUse1.png
  3. In the Edit Customer page, click the Address tab.
  4. In the Address pane, at the right, click Entity/Use Code and select an entity/use code.
  5. At the lower left, click Save.
    NetSuite2014_MapEntityUse2.png

Use a taxable checkbox

The Taxable checkbox in NetSuite lets you flag a customer as taxable. If you clear this checkbox, the customer is flagged as not taxable--exempt from tax, in other words. To learn where to find this checkbox, read set customer taxability.