After you've added an exemption certificate for a customer in AvaTax, there may be times when you need to collect tax from the customer for certain sales. For example, if you have a Resale exemption certificate on file for a customer but you sell them goods that they don't plan to resell, the customer may need to pay sales tax for that transaction.
Avalara allows you to use an Exempt Override Code to override an exemption certificate for a single transaction, so you can collect tax from a customer that is normally exempt.
Before you begin
- This guide covers how to override an exemption certificate by adding a transaction in Avalara. Transactions that are added in Avalara don't flow back to your business application.
- If your business application allows you to send your Exempt Override Code in the Entity Use Code field, you can set this up in the business application instead of in Avalara. Find your business application or system to see if this option is available.
- If you prefer to temporarily invalidate the exemption certificate while you process the transaction with tax in your business application, learn how to stop applying the exemption in Avalara, or invalidate the exemption in CertCapture.
- In Avalara, go to Transactions > Transactions.
- Select Add Transaction.
- In the Entity Use Code field, select Taxable - Override Exemption.
- Add and save your other document details. The following fields are required at the document level:
- Document Code
The unique ID for the invoice, credit memo, or return.
- Document Type:
The kind of invoice the transaction is modeled after.
- Document Date
The transaction document's date.
- Customer/Vendor Code
The ID associated with a customer in your business application.
- Ship from Country and Ship to Country
The state or province of the transaction's origin and destination.
- Ship from Address and Ship to Address
An address, ZIP code, or Canadian postal code for the transaction's origin and destination.
When you're finished, select Save and Add Line Detail.
- Document Code
- Add line items, including a Total Amount for each one.
If necessary, each line item can have its own address information and special tax handling. If you're an SST seller:
- You must enter a street address, the item code, and the item description.
- If you haven't already completed tax code mapping in AvaTax, you must enter the tax code.
- If you have the status of Volunteer, you can't use custom codes or tax overrides.
- Select Calculate Tax to preview the tax before you save the transaction.
If you make any changes, select Calculate Tax to recalculate the tax after each change. The tax amounts are shown for each line item. To see additional information, including tax rates and jurisdictions, expand the tax detail for a line item.
- Select Save.
Committed transactions are automatically included in AvaTax reports. If you use Returns, only committed transactions are filed. If you want to save the transaction for later reference but don't want it appearing in reports or returns, select Save as Uncommitted.