Avalara reports show you both the exempt and non-taxable sales amounts for your transactions. These both result in a tax calculation of $0.00, but the reason for the calculation is different.
Exempt and non-taxable sales
Exempt sales are based on the business or entity making the purchase. This means that the business or entity making the purchase is exempt from paying sales tax. Refer to this guide for common reasons that a business would be exempt from paying sales tax.
Non-taxable sales are based on the product or service being sold. This means that the product or service being sold is not taxable in the taxing jurisdiction. This is determined based on several factors, including the addresses you use in the transaction and the Avalara tax code that you use for the product or service.