Configure tax exempt customers

Some customers—such as resellers, government agencies, and nonprofits—may be legally exempt from paying sales tax. Tax-Exempt Billing Accounts make it easy to support these customers by automatically removing taxes during checkout, POS sales, and Salesforce order processing.

Tax-exemptions typically apply to Government entities, nonprofits, and organizations with a valid tax exemption status. Exemptions may also apply to B2B customers and resellers. Tax exempt transactions can occur at web checkout, point of sale (POS), and for Salesforce order tax calculation tools and automations.

The tax exempt feature:

• Skips tax calculations completely

• Removes all tax line items from carts and orders

• Ensures tax totals are $0

• Adjusts pricing when tax is included in the product price

Set a tax entity code for an account

To ensure all transactions associated with an account are marked as tax-exempt, you need to select a Tax Entity Code (tax_entity_code)for the customer account.

1. Open the customer account record.
2. Select a valid Tax Entity Code.
3. Select Save.

No additional configurations are required in your store.

An account remains taxable if:

• the value is set as TAXABLE (case-insensitive), e.g. "TAXABLE", "taxable", "Taxable".
• There is no value selected.

Tax exempt transaction behavior

Web checkout

When a tax-exempt billing account is linked to a cart:

• taxes are removed entirely.
• product tax records are cleared.
• tax totals become zero.

If pricing is tax-inclusive (tax already included in the price), the system will reverse the included tax so the customer pays the true pre-tax amount.

Example: A product priced at $110 including 10% tax becomes $100 for a tax-exempt customer.

Point of sale (POS)

When a tax-exempt account is linked to a POS cart:

• taxes are cleared from cart items.
• the cart updates immediately to reflect exemption status.
• if the customer is removed, taxes return automatically.

Returned items (negative quantity) also gets tax updated, but the item price is not recalculated.

Salesforce orders

When tax is calculated in Salesforce (via button action, flow, or Apex):

• exempt accounts bypass tax logic entirely.
• order item tax values are removed.
• totals become zero.

If pricing is tax-inclusive, Salesforce order prices may be adjusted to remove embedded tax, so the final unit price reflects the correct pre-tax value.

The Salesforce tax calculator interface displays:

• an Exempt badge when tax is zero.
• a warning if an order changes from exempt to taxable (especially for tax-inclusive pricing).

Guest checkout

If a guest enters an email address that matches an existing Salesforce contact linked to a tax-exempt account, the cart will automatically use that account and apply exemption, even if the customer does not sign in. If a customer starts checkout as a guest and later signs in, exemption is re-evaluated when customer info is resubmitted.

Tax exempt transaction limitations

This feature does not support:

• partial exemptions (exempt from some tax types but not others).
• per-product or per-category exemptions.
• tax certificate storage or validation.
• auditing or logging of exemption usage.

Tax exemption is all or nothing: the account is either fully taxable or fully exempt.

If an order switches from exempt back to taxable and uses tax-inclusive pricing, the system warns the cashier or user to verify pricing before recalculating taxes.