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Why is our exemption certificate not applying?

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Overview

There is a tax exemption form for a customer that is not making their sales exempt.

Environment

Avalara AvaTax

Resolution

The exemption must match all details of the transaction. Review the exemption certificate in AvaTax:

  1. In AvaTax, go to Exemptions.
  2. Search using the Customer Code that is on your transaction.
    • Exemptions must use the same customer code as your sale. 
  3. Find the exempt customer and select View Exemptions. Confirm that the state where your sale is being taxed is listed.
    • Certificates only exempt the state(s) listed.
  4. Check the effective and expiration dates 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 won't apply.
  5. Select Details to view additional certificate information. Check that the exemption is Blanket.
    • If Single is checked, it will apply to either the PO or Invoice number.
      • Only the last PO or Invoice number added to the single use certificate is valid.
  6. Confirm the exemption reason is correct. 
    • Depending on the state/province, the selected exemption reason may or may not be exempt.
  7. Check to see if there are any custom tax rules changing the behavior of the entity use code in question.
    • Check to see if you duplicated the Avalara default entity use code taxability with an Exempt Entity tax rule. This will override the Avalara system.  
      • Go to Settings > All AvaTax settings. Beside Custom Rules, select Manage.