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Avalara Help Center

Exempt Customers from Tax

There are different ways to exempt customers from tax. You can use an exemption number, entity use codes,HoverTT.png or use CertCapture. AvaTax allows you to exempt customers using the Sage 500 exemption process.

Exempt customers with CertCapture

To exempt customers from sales tax with CertCapture, you need to:

Create or select a customer

  1. Go to AvaTax > Utility > Create Customer Record in Avalara CertCapture.

  2. In the Create Customer Record in Avalara CertCapture window: ​

    1. Select a customer.
    2. To add/select the customer's address, click Validate Address.
    3. Click Create Customer.  The message "The Customer record has been successfully created in CertCapture." is shown. Click OK.

  3. Click Close.

Request an exemption certificate

  1. Go to AvaTax > Utility > Initiate Exemption Certificate Request.
  2. In the Initiate Exemption Certificate Request window:

    1. Select a customer.
    2. To add/select the customer's address, click Validate Address.
    3. Go to the Send Method section, select one of the options to send the certificate request.    
    4. Add a custom message. This field is useful for communicating instructions when using the Communication mode as Fax
    5. Click Initiate Request.

      The message "The Exemption Certificate Workflow Request has been successfully generated. Tracking code is xxxx-xxxxxxx" is shown.

    6. Click OK.
  3. Click Close.

Exempt customers with exemption certificate number

To flag customers as exempt, follow these steps:

  1. In Accounts Receivable, click + next to Maintenance, and then click Maintain Customers.

    S500-Maintain Customers.png
  2. Open a customer record.
  3. Click Sales Tax Exemptions.

  4. In the AVATAX Tax Code of State field, type the exemption number.
  5. Click OK.

Assign an entity/use code

Entity/use codesHoverTT.png let you exempt a transactionHoverTT.png and create custom reasons and custom exemption profiles. Entity/use codes are AvaTax specific designations, identifying various categories of exempt customers. Each entity/use code is associated with exemption tax rules for each state indicating applicable exemption scenarios. An invoice or credit memo using an entity/use code to trigger a customer exemption also uses the entity/use code to classify transactions for detailed exemption reporting within the Admin Console.This is useful for partially-exempt customers. For more information about available entity/use codes, see exemption reason matrices.

To assign an entity/use code to a customer, follow these steps:

  1. In the AvaTax Task, click + next to Maintenance.

  2. Click Maintain Entity/Use Code Mapping.

  3. Next to the Customer ID field, click the Magnifying Glass, and click the Customer ID you wish to select.
  4. Next to the Address ID field, click the Magnifying Glass, and click the Address ID you wish to select.
  5. Next to the Entity/Use Code field, click the Magnifying Glass, and click the Entity/Use Code you wish to select.
  6. Click the green checkmark to save.