Manage tax exemptions

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By default, this is a hidden feature and can be exposed by adjusting the permissions in the Application Dictionary. Additionally, custom development may be required to reveal tax fields and render tax exemptions fully operational. Optimizely recommends the use of Avalara or other third-party utilities for working with taxes, as they allow for increased functionality.

Create a tax exemption

Prior to completing the steps listed below, the permissions in the Application Dictionary must be customized to expose the taxExemption entity. Review the Application Dictionary article for more information: Work with properties in the application dictionary

Use the Admin Console to create a tax exemption for locations, products, or categories.

  1. In the Admin Console, go to Administration > Taxes > Exemptions.
  2. Click Add Tax Exemption.
  3. Fill in the corresponding information on the Details tab, including the Exemption Name, Description, Amount, and Activate On/Deactivate On dates. If the tax exemption should be live for an indefinite amount of time, leave the Deactivate On field blank.
  4. Click Save.
  5. Click the Exempt States finger tab to assign tax exempt states.
    1. Click Assign States.
    2. Select one or multiple states using the checkboxes on the left.
    3. Click Assign, then click Done to save changes.
  6. Click the Local Tax Rates finger tab to assign any existing local tax rates.
  7. Click the Exempt Categories finger tab to assign any tax exempt categories.
  8. Click the Exempt Products finger tab to assign any tax exempt products.
  9. Click Save.

Set up website and customer tax codes

Alternately, set up website and customer tax codes to create tax exemptions based on customers instead of locations, products, or categories.

Set up a website tax code

  1. In the Admin Console, go to Administration > System > Settings.
  2. Use the search box to search for Tax Free Tax Code.

    The Tax Calculator setting needs to be set to Standard in order to display the Tax Free Tax Code setting and it can be applied uniquely per website.

  3. Additionally, the following three fields need to be populated:
    • Tax Free Tax Code - the code entered here is compared against the code entered in the customer Tax Code field to determine if the customer should be taxed. This setting also applies to both State and Local taxes.
    • Tax Amount - This is the sales tax rate used for orders, and is used in conjunction with Tax Calculation setting to determine how this rate is calculated. The default value is 0.
    • Tax Calculation - If this setting is set to None, sales tax is not charged. If set to Percent, the defined percentage of the order total will be charged as sales tax for all orders. If set to Calculate, sales tax is calculated using the configured tax rates based on the customer order. The default value is None
  4. Click Save.

Set up a customer tax code

  1. In the Admin Console, go to Customers.
  2. Click Edit to edit a customer.
  3. Scroll down to the Billing section of the Details tab.
  4. In the Tax Code field, enter the same code entered in the website's Tax Free Tax Code field.
  5. Click Save.

Now, when the customer in question logs into the commerce site and orders a product, they are not taxed.