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How do I make a customer partially exempt from local tax?

Overview

You need to make a customer exempt only when they make purchases in certain local jurisdictions.

Environment

AvaTax

Resolution

  • Create an exemption that is unique to this customer
    • Create an exemption profile for the customer in ECMS or CertCapture OR add an entity use code to the customer in your accounting software and create tax rules in AvaTax
  • Create an exempt entity tax rule in AvaTax, go to Organization > Tax Rules
    • Create first rule
      • Select the jurisdiction where they should be exempt
      • Name rule Local Jurisdiction Exempt
      • Choose Exempt Entity rule type 
      • Choose Exempt Yes 
      • Chose exemption type/entity use code you attached to the customer
    • Create second rule
      • Name rule Taxable Areas of State
      • Choose the state level > select the state
      • Choose Exempt Entity rule type 
      • Choose Exempt No
      • Chose exemption type/entity use code you attached to the customer

Note: If the customer should be exempt only from the specific jurisdictions listed in the Local Jurisdiction Exempt rule (Example, customer is exempt from county tax, but still pays State and City tax), Import the rule instead with the isalljuris column set to no/off or 0.