How to Make a Customer Tax Exempt in BigCommerce

To make a customer tax exempt in BigCommerce, use the method that matches how your store calculates tax, as BigCommerce's help article describes. With basic tax, you create a customer group, exclude that group from your tax zones, and add the customer to the group. With an automatic tax provider, including our CereTax app, you enter a code in the Tax exempt code field on the customer record. The next section helps you pick one.

Which Setup You Have

BigCommerce says the process differs depending on whether you set up taxes manually with basic tax or with an automatic tax provider.

• Basic tax: go to "Make a Customer Exempt With Basic Tax," below. Customer groups need a Growth plan or higher.
• Automatic tax provider, including CereTax: go to "Make a Customer Exempt With an Automatic Tax Provider," below. To assign codes to many customers at once, see "Apply Codes to Many Customers by CSV Import."

BigCommerce says the automatic tax provider handles an order when both the order origin and the destination are in the regions you selected under Provider Targeting, and basic tax calculation applies everywhere else. Our setup guide says the same from the app side: you select the countries or subdivisions where CereTax calculates tax, and any you do not select use your basic tax settings. Check your provider targeting before you pick a section.

Before You Start

• Customer accounts. To view and edit customer accounts, you need the Read Channels, Manage Customers, and Edit Customers permissions.
• Customer groups. To view and manage customer groups, you need the Read Channels, Manage Customers, Manage Categories, and Customer Groups permissions.
• Tax settings. To view and manage tax settings, you need the Manage Tax Settings permission.
• CSV import. To import customers, you need the Manage Customers and Import Customers permissions.
• Plan. Customer groups are available only on a Growth plan or higher. BigCommerce says you cannot set up a tax-exempt group under basic tax without that feature.
• Documentation. BigCommerce says organizations typically provide documentation of their tax-exempt status. It tells you to check with a local tax professional before you enable tax-exempt customer groups, and says it cannot offer tax advice.

This page covers how BigCommerce records a customer as exempt. It does not cover which buyers qualify, whether a certificate is valid, guest checkout, or how an exempt order displays.

Make a Customer Exempt With Basic Tax

BigCommerce's basic tax method takes three actions: create a customer group, edit the tax zone to exclude that group from taxes, and add the tax-exempt customer accounts to the group.

1. If your store has no customer groups, create a customer group for retail customers. BigCommerce says customers in this group are taxed.
2. Go to Customers > Customer Groups, click Manage default customer groups, and select your retail customer group for both Guest customers and Registered customers. BigCommerce says this makes sure guests and registered customers who are not tax exempt are taxed.
3. Assign any existing non-tax-exempt customers to the retail customer group.
4. Create a new customer group for tax-exempt customers, and add each tax-exempt customer account to it.
5. Go to Settings > Tax and click Edit in the Tax rules section.
6. Open the Tax rates and zones tab. Under Tax zone applies to, select Only customers in these groups, and select all customer groups except the non-taxable group.
7. Repeat step 6 for each applicable tax zone.

Make a Customer Exempt With an Automatic Tax Provider

BigCommerce gives these steps for one customer.

1. Go to Customers > View and click the customer's name.
2. Under Customer Details, enter the code in the Tax exempt code field.
3. Save your changes.

With our CereTax app, enter one of the seven Tax-Exempt Codes listed in the set up guide.

If you use Avalara or TaxJar, BigCommerce's article points you to Avalara's exempt reason matrix and TaxJar's article on BigCommerce tax collection. BigCommerce also says all automatic tax providers use the Tax-Exempt Code field, and the field does not change if you switch providers.

Apply Codes to Many Customers by CSV Import

BigCommerce says you can assign a Tax Exempt Code to customers one at a time in the control panel, or in bulk with a CSV file customer import. Our setup guide describes the one-customer method.

For an import, BigCommerce says the Email Address field identifies existing customer accounts, and changing a customer's email address in the CSV file generates a separate customer account upon import.

1. Prepare a CSV file of 2 MB or less. Each record needs Email Address, First Name, and Last Name.
2. Go to Customers > Import.
3. Upload the CSV file.

BigCommerce lists Tax Exempt Code under Manually Added Fields. It is not in the Bulk Edit export template by default, you can add it to a custom export template, and BigCommerce says it is "Only used if you have enabled automatic tax calculation."

4. Match your column headers to BigCommerce fields unless the file came from the Bulk Edit template.
5. Click Start Import.

If Tax Calculation Falls Back

BigCommerce's Automatic Tax Setup article describes fallback tax. If the automatic tax provider cannot be reached, cannot validate the customer's address, or the shipping origin address is not set up, BigCommerce gives three ways to handle the order.

• Apply a flat 10% fallback tax rate.
• Use your basic tax configuration to calculate tax.
• Turn fallback tax off, and the customer cannot complete checkout.

If an order uses fallback tax, BigCommerce notes it in Viewing Orders. To change the setting, go to Settings > Tax.

If Tax Still Appears Under Basic Tax

If the Default Zone has a tax rate other than 0%, tax-exempt customers are charged that rate. To keep that rate in the Default Zone, create a separate tax zone with a 0% rate for the tax-exempt customer group.

If you cannot select customer groups for a tax zone, your store may have more than 1,000 customer groups. The control panel then shows an error, existing selections stay applied, and you update the zone by reducing the groups below 1,000 or by using the Tax Zones API.

Where the Certificate Lives

The group or the code records a customer's exempt status in BigCommerce. Certificate collection stays with you. Decide where your team keeps each certificate, and who reviews it before you add the customer.

Next Step

To see how CereTax fits your store, see CereTax for BigCommerce.