We’re making exempt sales easy in Shopify

Almost every seller has sales that are exempt from sales tax, whether it’s because a product isn’t taxable, the buyer has an exemption (for example, if they’re buying items to resell), or some other reason. And if you’re a wholesaler or sell B2B, you’ve probably got a lot of exempt sales.

However, that doesn’t mean you can just not collect sales tax and call it good. You need to understand why a sale is exempt, collect and validate a certificate from the buyer to prove it actually should be exempt, and manage those exemption certificates so you’re ready in case of an audit.

See our infographic with the five steps to exemption certificate compliance

It gets even more complicated as your business grows and sells in more markets. Just like other sales tax regulations, different states do things differently when it comes to exemptions. Auditors often target exempt sales because it’s easy for businesses to make mistakes — and as we all know, states don’t like missing out on tax revenue.

That’s where Avalara ECM comes in. Integrated directly into Avalara for Shopify, it makes it simple to manage your exempt sales. What can ECM do for your business?

• Streamline your process for collecting exemption certificates. Just because a buyer says they’re exempt doesn’t mean they are — they are required to provide an exemption certificate to the seller, which gives you “permission” not to charge tax. ECM allows exempt customers to self-submit exemption certificates directly from your Shopify store. 

• Automate certificate validation. You’re not done yet, though. Once you have a certificate, making sure it’s correct is on you. ECM can help you automate this validation step, checking for incomplete certificates, missing signatures, and more. Then, apply valid certificates at the time of sale, ensuring compliance and reducing audit penalties.  

• Keep your exemption records organized. If you’re ever audited, you’re going to need easy access to your exemption certificates — and it’s easy to misplace or even forget about them if you file them manually. Avalara’s cloud-based ECM solution makes storing, tracking, and managing your certificates a breeze.

Ready to learn more?

Whether you’re looking for a more efficient way to manage the exempt sales you’re already making, or you just want your business to be ready for potential exemptions, Avalara makes not collecting sales tax easy, too. Learn more about Avalara for Shopify here.