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How do I make a customer partially exempt for local tax?

Overview

You need to make a customer exempt only when they make purchases in certain local jurisdictions.

Environment

Avalara Avatax

Resolution

  • Create an exemption that is unique to this customer
    • Create an exemption profile for the customer in ECMS, Avalara CertCapture or Avalara Certs, OR
    • Add an entity use code to the customer in your accounting system
  • Create tax rules in the admin console, go to Organization > Tax Rules
    • Create first rule > click New
      • Choose the jurisdiction level > Select the jurisdiction where they should be exempt > click Next 
      • Name rule Local Jurisdiction Exempt
      • Choose Exempt Entity rule type 
      • Choose Exempt Yes 
      • Chose exemption type/entity use code you attached to the customer
      • Tax code:
        • If rule should apply only to some products, list tax code
        • Leave blank if you want this rule to apply to ALL purchases by this type of exempt customer
      • Choose date range when rule should be active > click Finish
    • Create second rule > click New
      • Name rule Taxable Areas of State
      • Choose the state level > select the state > click Next 
      • Choose Exempt Entity rule type 
      • Choose Exempt No
      • Chose exemption type/entity use code you attached to the customer
      • Tax code:
        • If rule should apply only to some products, list tax code
        • Leave blank if you want this rule to apply to ALL purchases by this type of exempt customer
      • Choose date range when rule should be active > click Finish

 

Note: If the customer should be exempt only from the specific jurisdictions listed in the Local Jurisdiction Exempt rule (Example, customer is exempt from county tax, but still pays State and City tax), Import the rule instead with the isalljuris column set to no/off or 0.

 

Details on importing rules here