Tax exemptions are useful in a variety of scenarios, from tax-free holidays, to out-of-state shipping, and certain customers. Artisan 4.7 introduces Automatic Exemptions.
Automatic Exemptions change applicable line items to No Tax (NT) instantly.
Read this article to learn how to apply them to your store.
- Where are Tax Exemptions in Artisan?
- Tax Exemption Examples
- Multiple Exemptions
- A Sale With at Least One Taxable Item
- Manual Exemptions
Where are Tax Exemptions in Artisan?
Head to the “Program Options” screen and navigate to “Business and Financial Settings.” Click on “Sales Tax Settings.”
Expand the “Tax Exemption Types” section.
This will open a list of your tax exemptions.
Tax Exemption Examples
Tax-Free Holiday
In this example, a store is allowing certain items to be exempt for hurricane preparedness. They’ll want to use a “Tax Holiday” exemption type.
In the “Tax Exemption Types” screen, click “Add.” Assign the tax exemption a short name and a long name. You may choose to adjust its order in this list as well by assigning it a different number. Make sure you have the “Class,” “Start Date,” and “End Date” columns on this screen. To add them, right-click and select “Configure Columns.”
Decide which categories to be exempt from sales tax. If we want all categories to be exempt, we’ll leave this “Exempt Categories” column set to all. Otherwise, type the category code(s) into this column. Separate multiple categories by commas. In this example, we are excluding just one category from sales tax, our hardware category.
Select a class. In this example, it is “Holiday” since it has a period of time it runs for. Select a start and end date for this tax exemption.
Press “Save.”
A customer wants to purchase a flashlight. The flashlight falls under the “hardware” category, so it is included in our Hurricane tax exemption. You’ll notice the tax exemption is identified in a yellow box on the sales screen, since Artisan automatically selects “NT” (No Tax) in the tax category for that item.
Note: You may set a tax holiday limit for each category if necessary. This is a good way to limit or exclude certain items from tax exemptions. For example, only items below $300 will be tax-exempt in the hardware category.
Customer-Exempt
You might want to exempt certain customers from sales tax, such as customers that are buying products for their nonprofit organization, items for resale, agricultural exemption, and other such scenarios.
We’ll assign our Tax Exemption a short and a long name, and an order. We’ll select “Customer” for our “Class.” Note that this class does not allow you to select a start and end date–only exemption types classified as “Holiday” can have a start and end date.
Press “Save.”
In the customer’s record, click on the “Sales Tax Type” dropdown and select “No Tax.”
Select which “Exemption Type” applies to them. You’ll need to type in a Tax Number before saving these changes.
Now, when the customer is rung up on a sale, their Exemption Type will show on the sale.
Out-of-State-Shipping
Out-of-state-shipping is another common example for excluding tax. Select a customer on the sales screen. Click on the “Shipping” tab.
If the customer is located outside of your state, Artisan will apply the “Out of State” exemption to this sale. (Ex. Your company is located in Florida and the customer’s state is North Carolina. Artisan automatically selected the “Out of State” exemption).
Multiple Exemptions
If multiple automatic exemptions apply, the priority is: Out Of State Shipping > Customer-Based > Tax Holiday.
For example, a customer buys a rugged flashlight that is currently tax-exempt under the “Hurricane” tax exemption holiday. They are also a tax-exempt customer because they are nonprofit. This item is being shipped out of state, and we have an out-of-state sales tax exemption. So, Artisan will label this sale as tax-exempt for the “most powerful” exemption, the out-of-state exemption.
A Sale With at Least One Taxable Item
What happens to a sale with items that are non-taxable and items that are taxable?
For example, a customer wants an item shipped to them out of state. There is another item that they want to take home with them. But, this item does not have a tax exemption tied to it, such as a tax holiday exemption.
Artisan will make note that the customer is tax-exempt for shipping (the yellow “Out of State” box at the top of the sale). Next, the item the customer wants to take home with them is added to the sale. Artisan will automatically add “No Tax” to that item since the sale is currently counted as an out-of-state exemption. To fix this “NT” exemption for the item, click on the “Tax” dropdown and select the proper tax, such as “Florida.”
Manual Exemption Types
Manual Exemption Types can only be triggered by manually changing one or more line items to No Tax (NT). Then, the specific type must be manually selected from the pull-down at the top of the Sale Screen.
If you have multiple sales that will require tax exemptions, we recommend using automatic tax exemptions. This will save you time from having to manually select the tax exemption for each sale/customer.