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Exempt customers from tax using an entity use code in Microsoft Dynamics 365 for Finance and Operations

Keep track of tax-exempt customer purchases on a case-by-base basis. This works best when you have only a few tax-exempt customers and you're not using Exemptions or CertCapture. If you choose this option, it's up to you to keep organized records of all exempt purchases.

Entity use codes are custom values that group similar customers for exemption purposes and link them to tax rules. AvaTax for Microsoft Dynamics 365 for Finance and Operations creates default entity use codes automatically when it's installed. To apply entity use codes in AvaTax for Microsoft Dynamics 365 for Finance and Operations, map entity use codes to customers or transactions. For more information about available entity use codes, see exemption reason matrices.

Map an entity use code to a customer to exempt them on:

  • Sales quotes
  • Sales orders
  • Sales invoices
  • Free text invoices

Map an entity use code to a customer project to exempt a:

  • Project sales order
  • Project invoice
  • Project invoice proposal

Steps

  1. In Microsoft Dynamics 365 for Finance and Operations, go to Avalara AvaTax > Utilities > Entity \ Use Code Mapping.
  2. Select New.
  3. To map an entity use code to a customer in the new line:
    • Select Customer Account from the dropdown list.
    • Select the name associated with the address from the Name or Description list.
      • If you select a single address for a customer, only that address uses the entity use code.
      • If you select a customer account and don't specify an address, all transactions for that customer use that entity use code.
    • Select the entity use code you want to apply.
  4. To map an entity use code to a customer project in the new line:
    1. Select Document Type from the dropdown list.
    2. Select the Project\Customer Account.
    3. Select a Description.
    4. Select the Address.
      • If you select a single address for a customer, only that address uses the entity use code.
      • If you select a customer account and don't specify an address, all transactions for that customer use that entity use code.
    5. Select the entity use code you want to apply.