Configure tax exemptions

You can recognize customers, customer addresses, and single sales as tax-exempt in Avalara.

How tax exemptions are calculated

Cin7 Core and Avalara work together to decide whether a sale is tax-exempt. Understanding how the two systems interact helps you set up exemptions correctly and troubleshoot unexpected tax amounts. For the full list of valid exemption reasons, see Avalara's Exempt reason matrix for the U.S. and Canada.

How exemptions are matched

Cin7 Core can send an exemption to Avalara in three ways. Avalara evaluates them in the following priority order.

When an exemption reason is sent, Avalara looks for a certificate that matches that exact exemption reason, customer, and region. If no matching certificate exists for that reason, tax is applied, even when the customer has a valid certificate for a different reason.

Set up a customer exemption

To exempt a customer, add them to the tax exemption list and create a valid tax exemption certificate that specifies the correct region and an exemption reason exactly as defined in the Avalara matrix.

Classify a customer as tax-exempt

If you have tax-exempt customers set up in Avalara, you can link them to customers in Cin7 Core from the Avalara integration settings.

1. Go to Integrations > Avalara.

2. Open Customer settings.

3. Click Load from Avalara.

4. Match each Avalara customer to a Core customer. All tax-exempt Avalara customers are listed.

5. Click Link on individual customers, or in the header to link customers in bulk. Customers must be selected to link in bulk.

Once linked, Cin7 Core references the linked Avalara customer for customer-level tax exemption evaluation when processing sales. Tax exemption is still determined by Avalara based on valid certificates associated with that customer.

You can manage linked customers in the following ways:

• Updating tax exemptions—Click Load from Avalara to retrieve the latest tax-exempt customers. Required when first setting up your Avalara integration, and after adding new customers in Avalara.

• Unlinking—Click Unlink on individual customers to remove the link and stop syncing their tax-exempt status. Or select multiple customers and click Unlink in the header to unlink in bulk. May be required after deleting customers in Avalara.

• Resetting links after integration changes—Changing the Avalara company in your Avalara integration settings or disconnecting the integration deletes all tax-exempt customer links. After reconnecting or selecting a new company, you must relink your Avalara customers.

If you need help managing exemption records in Avalara, refer to Avalara’s documentation.

Set tax-exempt customer addresses

Cin7 Core allows you to specify customer addresses as tax-exempt.

1. Go to Sales → Customers and select a customer.

2. On the Addresses tab, select a Tax exemption reason code from the available options.

3. Save your changes.

When processing a sale for this customer, if a tax-exempt address is selected as the Shipping Address, the tax exemption reason code will automatically be brought through to the document header. It can be changed or removed at this stage, if necessary.

Classify a single sale as tax-exempt

Individual sales can be classified as tax-exempt during the sales process.

1. Open a new sale or an existing draft sale.

2. Select a Tax exemption reason code from the available options.

3. Continue with processing a sale as usual.

Tax exemption reason codes

When you set a tax exemption reason, use the code that matches the customer's exemption type, as defined in the Avalara matrix.

Check whether a product is taxable

A product's tax code determines whether it's taxable in a given region. To check a tax code's taxability:

1. Go to Settings → What You Sell and Buy.

2. Search for and select the tax code.

3. Click Generate Taxability Matrix.

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