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How do I charge only State tax on my transactions that use AvaTax?

Overview

You have a customer that is exempt from Local taxes, but not State tax. You would like to know how to set this up in AvaTax.

Environment

Avalara AvaTax

Resolution

  • Option 1 - You can pass custom entity use codes
    • Create a Tax Rule import that is for an Exempt Entity tax rule that exempts County, City, and Special Jurisdiction tax
      • For a Guide on importing tax rules please see here
    • Import the spreadsheet into the Admin Console
  • Option 2 - You cannot pass custom entity use codes
    • Assign a pre-set entity use code to your customer
      • If the entity use code is Taxable in the state
        • Create a Tax Rule import that is for an Exempt Entity tax rule that exempts County, City, and Special Jurisdiction tax
          • For a Guide on importing tax rules please see here
      • If the Entity use code is Non-Taxable in the state
        • Create a exempt entity tax rule in the admin console to make the state tax applicable
          • For a guide an creating an exempt entity tax rule please see here
  • Option 3 - You always want to charge only State tax
    • Create a Tax Rule import with the key features
      • Column C = 1 (Rate Override Rule)
      • Column H = * (Asterisk)
      • Column J = 0
        • Repeat for each type of Jurisdiction excluding STA & CNT (Column G)
          • For a Guide on importing tax rules please see here

 

 

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