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What is considered best practice when given an exemption certificate after invoicing my customer and after reporting period has passed?


Customer has been invoiced, and when payment is received, tax has been subtracted from the payment, and an exemption certificate is supplied. 


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Best Practice would be:

*Credit back the customer for the full amount of the invoice (including tax)

*Apply exemption certificate to customer

*Re-invoice the customer, this time without the tax



Considered NOT best practice would be:

*Credit tax only in the admin console

  1. Login to the admin-console and go to the transactions tab.
  2. Click new.
  3. Fill out origin and destination addresses by clicking the orange hyperlinks for each address (located in top third of the page). Fields with an * are required.  These include doc code, customer vendor code, and document date.  Tax override data is required only if a tax override is being used.
  4. On the lines tab, click add new line.  Line No, Quantity, and Amount, are the only required fields.
  5. On the first line use positive quantity 1 and the pretax amount of the line.  In the tax code field, use NT (non-taxable)  Save.
  6. On line two, use positive quantity and negative line amount.  Save.
  7. Click calculate tax on the left hand side of the page.  The positive and negative line amounts cancel out, leaving only the negative tax.  

*The end result is a zero pretax amount (and therefore no impact to total sales) and negative tax only.









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