Adding Tax Exempt Numbers to Customer Records

Your customers may have tax-exempt numbers. Add your customers' tax-exempt numbers to their records, as described below. Sales tax will not be added for these customers during order entry, unless a tax exception group is assigned to the customer and the product they are purchasing, and the product is flagged as always taxable.

To add a tax exempt number to a customer record:

1. From the Files menu, select Customer to display the Customer Maintenance screen.

2. Display the customer record.

3. Use the Tax # hot key to display the Sales Tax screen.

4. In the Tax Jurisdiction Override field, select a tax jurisdiction code to use during overrides of sales tax.

Note: When this field is populated, the selected tax jurisdiction code is used for the customer in place of the default. This field is optional.

5. In the Line Item Taxability field, select one of the following the line item taxability options:

• Disable – The system does not allow the application of sales tax at the line item level. This is the default. 

• Always Prompt – Displays the previous the previous selection for that product each time this customer orders a product and prompts whether to change it.

• Prompt if Not Bought – Prompts for a tax selection when the customer orders a product that has not been purchased before. Thereafter, the system uses that selection and does not display any prompt.

• Enable – The system allows the application of sales tax at the line item level. The system prompts the user to specify each line item's taxability and allows them to update the TAX field when in the Line Item Taxable view.

6. In the Calculate Split Tax At Order Level field, indicate if you want to use split tax rates.

   Note: Split tax rates can be used when you apply different tax rates to different amounts. For example, you may apply a 7% tax rate if an item is from $1.00 to $999.00, but a 4% tax rate if an item is over the $999.99 mark. For more information, see Defining Split Tax Rates in the National Sales Tax Database documentation.

7. In the St column, press F10 to display a list of states and select one.

8. In the City/County column, enter one of the following to determine the area to apply the tax exemption to:

• /<Name of a city>

• !<Name of a county>

• Leave this field blank to have the tax exemption apply to all areas.

Note: This option provides the ability to apply city tax to a customer in a city where the customer takes possession of a product, regardless of the fact that the customer may be tax exempt in their own city of residence.

9. In the Type column, press F10 to display the list of tax-exempt types and select one. Tax-exempt types are defined using the Valid Tax Exempt Types control maintenance record.

Note: The system uses this field to determine taxability when generating invoices.

10. In the Exempt # column, enter the customer’s tax-exempt number. If you leave this field blank, it means that the customer is taxable for the state that they are in.

Note: The system uses this field to determine taxability when generating invoices.

11. In the Exp Date field, enter the date that the tax-exempt number expires.  If this field is left blank, the number will never expire in the state in which it applies.

12. Repeat steps 4-8 if the customer has tax-exempt numbers for multiple states.

13. Press Esc until the updated customer record is saved.

See Also:

Sales Tax Jurisdiction Codes Overview

Sales Tax Overview

Creating Tax Exemption Statuses at Jurisdiction Levels