Why is our exemption certificate not applying?
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:
- In AvaTax, go to Exemptions.
- Search using the Customer Code that is on your transaction.
- Exemptions must use the same customer code as your sale.
- 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.
- 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.
- 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.
- If Single is checked, it will apply to either the PO or Invoice number.
- Confirm the exemption reason is correct.
- Depending on the state/province, the selected exemption reason may or may not be exempt.
- 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.
- 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.