Managing Customer Exemption Certificates

When a Customer Shouldn't Pay Tax

Resellers, non-profits, and government buyers are often legally exempt from sales tax — but only when a valid, on-file exemption certificate backs it up.

Recording an Exemption

1. On the customer record, add an Exemption Code (e.g. resale, non-profit) for the relevant State/Jurisdiction — exemptions are jurisdiction-specific, not blanket for the whole customer everywhere.
2. Set whether it applies to All Jurisdictions or just the one specified.
3. Keep the actual signed certificate document attached/filed (Documents app) — an exemption code without the backing paperwork won't hold up if your business is ever audited.

Exemption States

An exemption rule has its own status/lifecycle — keep expired or superseded exemption certificates from silently continuing to apply; review customer exemptions periodically, since many certificates (especially resale certificates) require periodic renewal in various US states.

Best Practices

• Always test configuration changes in Sandbox before touching Production.
• Keep product tax codes reviewed whenever you add a new product category — an unmapped product defaults to general taxable, which may be wrong for special categories.
• Reconcile Quickenerp's tax report (Financial Reports course) against Avalara's own reporting periodically — they should agree since Avalara is the source of truth for the actual calculation.