How to Mark a Customer Tax Exempt in QuickBooks Online

To add a tax-exempt customer in QuickBooks Online, select New customer, go to the Additional info section, select the checkbox This customer is tax exempt, and choose why in the Reason for exemption dropdown, as Intuit's customer setup steps describe. To change a customer you already have, follow Intuit's steps for editing customer info. If you use our CereTax QuickBooks Online app, you create exemption rules in the CereTax portal. See the section If You Use the CereTax QuickBooks Online App, below, for that setup.

Who This Applies To

This page is for bookkeepers and accounting leads who use QuickBooks Online in the United States. The steps to add a customer follow Intuit's customer setup article, updated August 5, 2026. These steps add a new customer. For an existing customer, see "Change an Existing Customer." If your screen differs from the steps, follow Intuit's articles.

These steps do not cover which buyers qualify for an exemption or how long to keep a certificate.

Before You Start

• Get the buyer's number or certificate. For sales to tax-exempt organizations, Intuit says to get a copy of the buyer's tax-exempt number or certificate issued by the state or province they are in.
• Confirm which goods and services are taxable. Intuit says to always check with your state tax authority to confirm which goods and services are subject to sales tax.

Steps to Add a Tax-Exempt Customer

1. Go to All apps, then Customer Hub, then Customers & leads, and select New customer.
2. In the Customer display name field, enter what you want to display for the customer. This field is required.
3. Review each section and enter any other important customer info.
4. On the customer record, go to the Additional info section and select the checkbox This customer is tax exempt.
5. In the Reason for exemption dropdown, choose why the customer is tax exempt.
6. Select Save.

Change an Existing Customer

Intuit's edit article gives steps for a customer you already have. Intuit says that when you change customer info, such as taxable status, the change updates previously sent invoices or recurring transactions that use the info.

1. Go to All apps, then Customer Hub, then Customers & leads.
2. Select the customer you want to update.
3. Select the Customer Details tab.
4. Select Edit.
5. Make any changes.
6. Select Save.

Intuit's edit steps do not name the tax-exempt checkbox or the Reason for exemption dropdown.

Check an Invoice for the Customer

This check covers accounts where Intuit's automated sales tax calculates the tax. If you use our app, see the section If You Use the CereTax QuickBooks Online App, below.

Intuit's sales tax exemptions article says to follow the Add a new customer steps to keep a customer from ever getting charged sales tax on an invoice. After you save the customer, create an invoice for that customer and check that it carries no sales tax. If it carries sales tax, work through the next section.

If Tax Still Appears on an Exempt Customer's Invoice

If the invoice still carries sales tax, recheck these in order. This section covers accounts where Intuit's automated sales tax calculates the tax.

1. Confirm that you saved the customer with the checkbox This customer is tax exempt selected and a reason chosen in the Reason for exemption dropdown.
2. Intuit says QuickBooks automatically calculates the total sales tax rate for each sale based on three inputs: the customer's sales tax exempt status, where you sell or ship, and the sales tax category of the service or product. Intuit's setup steps also say to make sure you have your customers' correct sales tax status, billing address, and shipping address. Confirm those for this customer, and confirm the sales tax category of the item on the invoice.

If You Use the CereTax QuickBooks Online App

We connect to QuickBooks Online through a certified app that calculates and applies tax inside QuickBooks.

For our app, all customer and product settings are managed in the CereTax portal, and you create exemption rules there. A rule that references a customer maps the QuickBooks field Customer Name to the CereTax field customerAccount. If a Customer Name is longer than 50 characters, we accept only the first 50. Ask your implementation specialist for help setting up customer exemptions.

We calculate tax each time you save a QuickBooks document. To view the calculated tax, save the transaction, close it, and reopen it in QuickBooks. Tax then shows as one or more lines on the transaction or in the native Tax field, depending on how you configure our app.

If your account uses automated sales tax, our app overrides that calculation. At least one line on the document must be marked Tax = true for our amount to stay on the document.

If tax still appears after you close and reopen the transaction, review the customer's exemption rule in the CereTax portal, including the customerAccount value that matches the QuickBooks Customer Name (first 50 characters).

For certificates, SmartExempt, our exemption certificate management product, stores certificates encrypted and sends alerts for missing, expired, and invalid certificates.

Next Step

To ask us about your QuickBooks Online exemption setup, contact CereTax.