Define tax exemptions to fully or partially exempt a customer, item, or range of items from specific tax codes. You can create exemptions against customers or items for either locations or specific tax codes.

To use customer exemptions, set the Use Customer Exemptions system option to ’Yes.’ To use product exemptions, set the Use Product Exemptions system option to ’Yes.’ To exempt customers or products from tax codes with a type of ’VAT’ or ’Sales,’ set the appropriate Use Tax Code system option to ’Yes.’

To exempt a customer from all taxes, use the Customers window to assign this customer to a tax code with a zero tax rate. To exempt an item from all taxes, use the Items window to assign this item to a tax code with a zero tax rate.

You can only define a tax rate exemption for items that can be entered on an invoice and have a status of ’Active.’ In addition, if you create more than one exemption for the same customer, item, tax code, reason, or certificate number, the date ranges of these exemptions cannot overlap.

You can also use the Tax Exemptions window to update the status of your exemptions. If you need to add an exemption number to an Unapproved exemption created in the Transaction window, you must change the status of this exemption to ’Expired’ and recreate the exemption with the number.