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Who You Exempt

This article applies to:Avalara AvaTax for NetSuite

An exemption certificate number identifies a buyer as exempt. If you regularly sell to tax-exempt customers, you need to consistently exempt their purchases. You also need copies of all of your customers' exemption certificates in case of an audit. There's more than one way to do both:

  • If you already have a method to store exemption certificates, send customers' exemption certificate numbers to AvaTax Update using your business application, or send entity/use codes that explain why the customer should be exempt.
  • If you don't already have a way to store certificates, use Exemptions or CertCapture, depending on your needs:
    • To exempt buyers and store their exemption certificates, use Exemptions.
    • To exempt customers, and to request, generate, and store exemption certificates, use CertCapture.

You can exempt customers, but that doesn't mean you're compliant. You need valid documentation of your buyer's exemption certificate to support tax exemptions in case of an audit. Valid documentation includes copies of valid exemption certificates and the associated invoices. If you exempt customers from tax with exemption numbers or entity/use codes, keep organized records for all exempt purchases.

Use CertCapture

CertCapture manages exemption certificates and other compliance documents. Use it with or without AvaTax Update. Use CertCapture to:

CertCapture stores exemption information and official copies of exemption certificates for each customer. With CertCapture, you always have an organized, audit-ready database of exemption certificates.

If you're not using CertCapture to manage exemption certificates, contact your Customer Account Manager (CAM) for more information.

Add a customer record to CertCapture from your accounting software

These are instructions to add one customer record to CertCapture from NetSuite. To add many customer records at once, go to CertCapture.

  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 AvaTax Exemptions

Use exemption certificate numbers or entity/use codes

An exemption certificate number identifies a buyer as exempt. To exempt a customer, enter the buyer's exemption number on the invoice when making a sale.

AvaTax uses an entity/use code to exempt a customer from tax. An entity/use code works in two ways:

  • The code flags a transaction with a reason for the exemption based on the entity that's buying
  • The code flags a transaction based on how the buyer uses what they purchase

Entity/use codes are applied based on government laws. Use your accounting software to assign entity/use codes to your transactions.

Exempt customers from sales tax with an exemption certificate number

  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.

Create custom entity/use codes

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.

Exempt customers from sales tax with an entity/use code

  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

 

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