We have a customer who has provided a direct pay certificate applicable to specific products in a specific state. Meaning that we should no longer charge them sales tax on orders for those products in that state, but should continue charging taxes for other products or when the orders are going to other states.
I’m trying to figure out a way to setup an exemption based on the combination of customer, part, and state but I can’t find any standard way to do it.
I’m aware that I can exempt products from specific Tax Codes using the Product Tax Category on the part, but that is too broad. The product is still taxable under the Tax Code, just not for one specific customer.
I’m also aware that I can exempt a customer from a specific Tax Code, but again that is also too broad because we still need to charge that customer taxes for the other products they order.
Does anyone know of a standard/configurable way to do this type of exemption?
If not, has anyone had any luck with a BPM that does something similar?
I am not in front of my computer, but I believe you can set the tax code at order line level as well. Are you guys using Ava tax?
I believe your best option is to use Entity/Use Codes for the applicable sales orders from that particular customer. See the following KB articles for more details about Entity/Use Codes:
Partial exemptions for California Tax Connect tax calculations
Exemption Overrides using Entity Use Codes in Tax Connect
Also, I suggest checking out this topic: Avalara and CA Partial Tax on MFG Machinery
Lastly, another option might be this: Create a Single use exemption certificate
Hope this helps!
Thanks for the responses!
Unfortunately, we don’t use Avalara or Tax Connect. We only use the basic tax functionality that comes with the ERP order management module.
Our sales tax has been very simple until now because we sell only a handful of products and only sell in two states, so we didn’t see a need to pay for a separate tax tool. I’m guessing I will have to try to think up a BPM that modifies taxes when the order is entered.