[Teresa Miller-King]

Has anyone had any experience with a partial sales tax exemption and how to set it up in the Tax Jurisdictions?  We have experience this situation with California when it appears to deal with leases of product.

Any help will certainly be appreciated.

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Teresa Miller-King
Bulldog Battery Corporation
Wabash IN
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[Andrea Riviezzo]

Hi,
I’m guessing it’s the customer that’s partially exempt vs the product? If product easy enough to do a new tax group and attach to the item, making that item tax exempt (if it’s not tax exempt in other states it might be you need a mod and/or manual work to ensure it’s accurate).
If the customer make sure you don’t have anything filled in on the Tax Exemption No or it will auto certify all the sales (which I’m sure you knew but jic).
I might be over simplifying but I would think you would need to create a new Tax Group that’s Product but with a zero tax rate for the local (most time in CA that’s the story) and then do a Tax Jurisdictions with the state CA rate and the local that’s exempt – then attach that new one to the customer card(s) and/or Ship to Addresse(s) that are impacted by the difference in local vs state tax.
While normally in CA it’s more the law vs a customer certificate making them exempt, but be sure to save any documents that validate you properly followed the tax exemption protocols.
Thanks!

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Andrea Riviezzo
Inovonics
Louisville CO
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[Teresa Miller-King]

?Good Morning,

Thank you for the information. The partial exemption is reducing the normal tax by a certain percentage. I am unsure how to handle this as the state, local, county and or city tax is constant.  I am struggling on how to reduce the tax on an individual customer without effecting any other customer in that jurisdiction.

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Teresa Miller-King
Bulldog Battery Corporation
Wabash IN
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[Andrea Riviezzo]

If you just do a tax jurisdiction that’s only for them and attach to them it should do the trick (then it won’t impact any one else). So let’s say they are in San Fran, you’d create a San Fran 2 with the lower percent, and then a Tax Jur with normal Cal, normal local and then San Fran 2.
I haven’t seen anything else in native NAV or external software that can handle that in a more simple format, like there’s no box to check that says this customer is 1% lower tax than this other customer. If it’s someone you don’t do business with often, maybe setting up all new tax jurisdiction is a lot, and more of a tax credit refund might be more in order.
As far as filling, depending on how you do it you might have some more issues. Since most states/cities have the $X by y% = tax liability. However, I do hear CA has a common issue with that partial exemption so maybe they can handle it better.

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Andrea Riviezzo
Inovonics
Louisville CO
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[Teresa Miller-King]

?Good Morning? Andrea,

Thank you for your help and advice.  I believe I will try setting the tax jurisdiction as suggested.  I believe it will be the simplest way as well.

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Teresa Miller-King
Bulldog Battery Corporation
Wabash IN
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[Drew Jennings]

Hi Teresa,

This is really difficult to do within the NAV native tax tables. I’d need some more details about the products you’re selling and the exact taxability challenge, but tax automation services such as Avalara can handle challenging taxability scenarios such as yours. Please feel free to reach out to me directly and I’d be happy to provide some free advice.

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Drew Jennings
Avalara
drew.jennings@avalara.com
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