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Why is tax applying to my exempt customer?

Overview

I have a customer that has an exemption certificate on file, but tax is still calculating. I even applied a header E/U code to try to exempt, with no change.

Environment

Avalara AvaTax

Resolution

  • Review the transaction (Transactions > click Document Code > Edit):
    • Remove any tax override forcing a certain tax amount (can be on document or lines tab)
    • Remove "Taxable" if listed in Entity Use Code field
    • Click Calculate to see that tax is changed to $0 (or expected amount if partial exemption)
  • The exemption must match all details of the transaction, review the exemption certificate in the Admin Console:
    • Go to Organization > Exemptions
    • Filter using the customer code that is on your transaction
      • The exemption must have the same customer code as is on your sale, if not there, create one
    • Confirm that the state where your sale is being taxed is listed
      • Certificates only exempt the state(s) listed
    • Click ">" and check the Signed/Effective date of your exemption cert, it must be on or before the docdate of your transaction
      • If the Signed/Effective date is after your transaction date, it will not apply
    • Click on the customer code to see the Certificate Details > check that the exemption is Blanket
      • If Single is checked, it will only apply to that PO or Invoice number