Using Customer Tax Locations and the Tax-Exempt Flag

Sales Tax Overview | Using Tax Locations

Basic

There are two ways You can automatically have Point of Sale collect the correct amount of sales tax on sales to customers that qualify for special tax handling.

- Specify that the customer is tax-exempt. This is the easiest option if sales tax is never charged on sales to the customer, such as may be the case with charitable organizations or certain re-sellers.

Example: The customer is from another state and your tax regulations do not require sales tax to be collected on out-of-state sales.

A hard-coded tax location, named Exempt, is used on sales to customers you have marked as tax-exempt and has an automatic 0% tax rate for all tax codes. The Exempt tax location is not displayed in your sales tax preferences, but is available for filtering sales reports.

- Set up and assign a tax location to the customer. This option is best if the customer is taxed, but at a different rate than your normal tax rates. You are prompted to apply the customer tax location when making a sale to the customer, but can elect to do so or not on individual sales.

To set up special customer tax handling:

1. While adding or editing a customer record, select the Customer Settings section.

2. Select a tax location from the T ax Location drop-down list. Only tax locations previously set up in company preferences are available.

Or

Select the Tax-exempt check box.

3. Complete the record and save.

Related Topics

Edit a customer record

Customers overview