Adding Sales 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.

You can add more than one tax exempt number. The system uses the first if it is not expired. If the first is expired, the system uses the second number.

To add a tax exempt number to a customer record:

  1. From the Maintenance menu, select Customer to display the Customer Maintenance window.

  2. Display the customer record.

  3. From the Pricing menu, select Sales Tax to display the Sales Tax window.

  4. In the Tax Jurisdiction Override field, press F10 to display the list of tax jurisdiction codes and select one.

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.

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

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

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

  4. 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.

  5. 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.

  1. Use the Calculate Split Tax At Order Level check box to indicate if you want to use Closedsplit 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.

  2. In the State column, select from a list of states.

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

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.

  1. In the Type column, select from a list of tax-exempt types. Tax-exempt types are defined using the Valid Tax Exempt Typescontrol maintenance record.

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

  1. In the Exempt Number 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.

  1. 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.

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

  3. Save your changes and exit the window.

Note:If you are setting an exemption at the bill-to level for a state, the system prompts you to indicate if you want to copy the tax information to all related ship-to accounts.

See Also:

Sales Tax Jurisdiction Codes Overview

Sales Tax Overview

Creating Tax Exemption Statuses at the Jurisdiction Level