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Exemption certificates
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This article applies to:

  • Product: ONESOURCE Determination,ONESOURCE Indirect Tax

Exemption certificates overview

Using exemption certificates, you can correctly calculate tax on transactions for which part or all of the transaction as tax-exempt.
note
Depending on your configuration, you have access to either Exemption Certificates or Certificate Manager. These features aren't available concurrently.
Each exemption certificate:
  • Applies to a particular customer.
  • Is valid in 1 or more countries or related authority types/authorities (U.S. and International) or state or related authority types/authorities (U.S. only).
  • Is valid for a transaction meeting certain criteria, including a particular product or service.
  • Has an exemption amount or rate associated with the exempted product or service.
  • Can be valid for 1 or more transactions.

Exemption certificate processing logic

When a transaction's processed, the product checks to see if the company's using exemption certificates, and then determines which customer group's relevant to the transaction.
  • If the XML input includes the <CUSTOMER_GROUP_NAME> and <CUSTOMER_GROUP_OWNER> elements, the search limits to the specified group.
  • If the XML input doesn't include these elements, the search limits to the group specified on the company's details page under
    Optional Company Information
    .
The product searches for the customer in the active group for the transaction. The customer's specified in the XML input either by <CUSTOMER_NUMBER> only (default) or <CUSTOMER_NUMBER> and/or <CUSTOMER_NAME>. The product searches for certificates associated with the selected customer.
These input conditions get tested:
  • Exempt reason
  • Certificate number
  • Certificate effective date range
  • Certificate status
  • Limited certificate use criteria
  • Product code criteria list
    note
    If the certificate contains a list of product codes, the exemption only applies to lines that include a product code from the list.
  • Commodity code criteria list
    note
    If the certificate contains a list of commodity codes, the exemption only applies to lines that include a commodity code from the list or lines that include a product code that's mapped to a commodity code from the list.
  • Applicable zones and authorities
  • Currency

A certificate match

At a minimum, a certificate must match the customer, invoice date or certificate date, and ship-to address.
important
If multiple certificates are found that can apply to a transaction, the first one returned with the approved status is applied. The first exemption certificate found with a valid date range gets selected. For this reason,
it's important you end date unwanted certificates
. Otherwise, you could have unintended results. For example, if you've 2 certificates, both effective on January 1st, but the first one has no end date while the 2nd one has an end date of February 15th, a transaction on March 15th would be exempt because the first certificate didn't have an end date. If no approved certificates can be found, the first temporary certificate's applied.