Handling Tax-Exempt Customers

PROCESS UPDATE:

Update as of 11 DEC 2024

Moving forward, L1 and L2 can now handle tax-exempt customers asking to add their certificate and inquiring about refunding their tax. 

We no longer need to engage CSM for these requests.

Tax Exempt entities are mostly businesses and schools.

Verifying and Marking Account as Tax-Exempt

• Tax-Exempt Certificate is normally in a PDF file

• Check the entity's tax-exempt status at IRS Exempt Organizations Search (https://apps.irs.gov/app/eos/)

• Check the entity's tax-exempt certificate's expiration date and ensure it is still active

• Once confirmed, update the customer account settings in Shopify to "Tax Exempt." (See sample photo below)

• Save the PDF file to Shopify and attach the Tax-Exempt PDF to their account for reference.

How to validate using IRS website:

• Using their Tax-Exempt Certificate, an EIN (Employer Identification Number) should be in the certificate, use this number to search in the IRS website

• If EIN is not available, you can also try using their Organization/Company/Business Name

Refund Requests for Taxes Already Paid

• If the customer has already paid taxes, ensure to get the tax exempt certificate, validate it and check the expiration date. If the certificate is still valid, refund the tax from the most recent order and advise the customer that they should no longer be charged taxes moving forward.