Crediting Tax-Exempt Customers

If a customer notifies you that it received an invoice that included taxes, and the customer is tax-exempt, use these steps to correct the problem:

1. In the Tax Interface Invoice Tax Credit form, select the customer order invoice for which you want to credit the tax amount.
2. Information about the invoice is displayed. Verify that it describes the invoice you want.
3. Click Check Invoice in AvaTax to look up the selected invoice in the AvaTax database. The system displays the amount of sales tax that was calculated for the invoice.  
4. If AvaTax has determined that it can reverse the transaction, Can Credit Tax is selected, and the Process Tax Credit button is enabled. If Can Credit Tax is not selected, go into AvaTax and ensure that the customer is listed as tax-exempt. Then try again to process the invoice in this utility.
5. Click Process Tax Credit to post the exemption through AvaTax.

After the exemption is processed, Tax Credited is selected to indicate that the invoice has already been credited through AvaTax.

Notes

• During the AvaTax lookup (step 3), these tasks are performed:
  • Verify the original invoice tax amounts inSyteLine  vs. AvaTax
  • Verify that this invoice has not already been exempted through the utility
  • Post a new return invoice to Avatax for today’s date with an invoice number of OriginalInvNum_TC with all the header/line information, so that it negates the original invoice that was posted.
• During the AvaTax processing (step 5), these tasks are performed:
  • Post a new sales invoice to AvaTax for all the same original header/line information except that it is forced to be tax exempt. The new invoice has an invoice number in AvaTax of OriginalInvNum_EI.
  • Create a credit memo in A/R against the customer order for the tax amount on the original invoice, and adjusts the customer order to reflect the invoice credit.
• Customers should be set up as Exempt in AvaTax for any future invoices that will be generated.
• This utility only allows you to credit the full amount of tax on the invoice.

Related Topics

Setting up an Avatax Tax Interface