Your exempt customer has a valid certificate in CertCapture but is still being taxed in AvaTax.
CertCapture and AvaTax
CertCapture forwards certificate information to your AvaTax account whenever a new certificate is added or an existing certificate is changed, as long as it meets specific criteria and is a valid certificate.
If an exempt customer is still being taxed, two problems could have occurred:
- The certificate wasn't transferred to AvaTax because of a conflict with CertCapture
- The certificate was transferred to AvaTax but something in your settings or transaction data is removing the exemption
Confirm that the certificate is in AvaTax:
- Click the Organization tab, click the company with the exemption, and then click the Exemptions sub-tab.
- Find the exemption certificate by its certificate or customer number.
A: The certificate isn't in AvaTax
- Sign into CertCapture and search for the certificate. Click the certificate to view its details.
- Click the History tab. Any errors that occurred while sending the certificate to AvaTax are listed in chronological order.
- Correct any errors that are shown in the History Tab.
Example error: Description Reason Code is not exempt in region(s): ( Invalid ExemptReasonId and region combination )
AvaTax won't accept a reason code for a state or region that isn't fully exempt.
CertCapture's exemption criteria is more flexible, so the certificate may be valid in CertCapture but rejected by AvaTax.
Example: Reason Code G is taxable in Ontario. Since it isn't fully exempt, AvaTax doesn't accept it when CertCapture tries to send it over. This creates a transaction in AvaTax with reason code G that is not exempt.
B: The certificate is in AvaTax, but not exempting properly
- Confirm that exemption certificate settings aren't being ignored.
- Click the Settings tab and then click Exemption Certificate Options.
- United States and Canada should be set to Optional or Required
- Confirm that the entity use code being used is exempt in the state or region where the transaction occurred. Use our Exemption Matrix to check.
- For example: Resale exemptions (Entity Use Code G) are not fully exempt in Canada. AvaTax won't accept certificates for a entity use code that isn't fully exempt.
- Confirm that your transaction and certificate information match:
- Check your custom tax rules to make sure one isn't making the entity use code taxable.