A sales tax exemption is when a purchaser can legally make a tax-free purchase with the help of an exemption certificate. This certificate documents the exemption the purchaser claims to make a tax-free purchase. Some common exemptions are:
- Multiple Points of Use Exemption
- Non-Profit Exemption
- Resale Exemption
The purchaser is responsible for determining whether they are making an exempt purchase and adequately completing the exemption certificate. Upon purchase, the seller reviews the exemption certificate. When completed properly, the seller can accept the certificate in good faith. In Anrok, this exemption certificate can be added to the customer's profile to prevent Anrok from calculating tax. See Add a sales tax exemption certificate.
The retailer must charge and remit a sales tax if the customer does not provide a valid exemption certificate. Sellers have the burden of providing proof to support any non-taxed sales when audited, in which auditors may instruct a seller to provide copies of exemption certificates. Therefore, without an exemption certificate, the seller must charge and remit sales tax.