Generally, if a customer has a tax exemption certificate, they will be tax exempt for all tax rates at all jurisdiction levels within a particular state. However, some states, such as Colorado and Louisiana, allow customers to be exempt at specific jurisdiction levels. For example, a customer could be exempt from state tax, but not for local or city taxes. Use this procedure to define tax exemption statuses at specific levels of jurisdictions.
To create tax exemption statuses at the jurisdiction level:
From the File menu, select Customer to display the Customer Maintenance window.
From the Pricing menu, select Sales Tax to display the Sales Tax window.
Move your cursor to the row that displays the state, city, or county that you want to create a tax exemption status for.
From the Edit menu, select Jurisdiction Exemptions to display the Jurisdiction Exemptions window.
Note: This menu option is active only if you have the National Sales Tax companion product. For more information, see National Sales Tax Database Overview.
Move the cursor to one of the following jurisdictions that you want to create a tax exemption for:
State
County
City
County Local
City Local
In the Taxable column, select the check box to indicate the exemption status of that jurisdiction. For example, if the user is exempt from state taxes, select the State check box. The default for all jurisdictions is an unselected check box.
The following occurs:
First, the system checks for exemptions in the following order of jurisdictions:
City
County
State
City Local
State Local
If more than one exemption is found, the system uses the first occurrence of an exemption. If no exemption is found, there will be no exemption on the order.
Second, the selected exemption number displays on the Header window in Sales Order Entry in the Tax Exempt ID # field.
If the exemption does not apply to all jurisdiction levels, an asterisk (*) displays next to the field to indicate that this is only a partial exemption. Clearing out the Tax Exempt ID # field removes all exemptions from the order. Changing the value in the field makes the order completely tax exempt. For more information, see Sales Order Entry.
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