AutoFile & Untaxed, Exempt and Wholesale Transactions
CAN TAXJAR TELL WHICH OF MY ITEMS ARE EXEMPT?
Our Reports are based on the transaction information we receive from your cart.
- This means that for most carts, if you don't collect sales tax on a transaction, our system will see that the sale is untaxed, but we're not able to see an explanation that tells us why a particular item was untaxed.
- For this reason, AutoFile is based on the Expected Sales Tax Due Report in your account.
However, for some carts you can categorize your exempt items inside of your TaxJar account so your TaxJar Reports will recognize your Product Tax Codes and exclude your exempt sales.
- Please note this feature is currently supported for Amazon and Shopify sellers or SmartCalcs API customers, but options for other Linked Accounts are coming soon.
- If you have a combination of unsupported carts connected to your TaxJar account, you will not be able to use this feature until we support exemption categorization for all carts you have Linked to TaxJar.
- We show you how to do this here.
WHAT ABOUT MY WHOLESALE ORDERS OR SALES TO EXEMPT CUSTOMERS?
Yes! No matter what cart you are using, if you sell wholesale items or make sales to exempt entities such as government or educational institutions, you can mark those as exempt in your Reports by designating those individual transactions in your TaxJar account as exempt.
- See how to designate individual wholesale exempt transactions in TaxJar here.
- We are also working on functionality to allow you to automatically designate sales made to specific customers as exempt, so you don't need to designate them one at a time. Click here to request to be notified when this feature becomes available.
CAN AUTOFILE EXCLUDE MY EXEMPT TRANSACTIONS?
We're working on ways to better support exempt product categorization for other carts moving forward. However, because of this current limitation, if you are not yet able to categorize your exempt products, if you enroll in AutoFile, we will view all of your transactions as taxable when we file your returns.
- This means we'll report to the state that all of your sales during your entire filing period should be taxed, which will result in filing a payment that's closer to the estimate you see in the Expected Sales Tax Due Report, rather than the amount you see in your Actual Sales Tax Collected Report.
- If you're currently selling (or plan to sell) a large amount of exempt or nontaxable items, this may calculate a much higher total of what's owed and you'll end up paying the uncollected taxes out of pocket on all transactions.
For now, if you have a large number of untaxed or tax exempt items and are unable to designate them as tax exempt in TaxJar, we suggest that you file a manual return rather than enrolling in AutoFile at this time.
And if you click here, we'll notify you when we're able to support classifying your untaxed and exempt transactions with AutoFile!
- Remember that all users can classify wholesale orders for AutoFile using the method here!
HOW CAN I MAKE SURE MY EXEMPTIONS ARE APPLIED TO MY RETURNS? HOW LONG CAN I APPLY EXEMPTIONS?
You'll need to make sure your exemptions are applied while the Report is open and editable BEFORE your Report is locked for filing.
- You can do this at any time before your return begins processing.
- You can also do while a return is in the Yellow (Scheduled) state on your Dashboard.
- If you mark transactions as wholesale/exempt or categorize products in the Exemptions tab after the state is marked as Blue (In-Progress/Submitted) or Green (Completed) on your account's Dashboard, those changes will not be applied to any return in that is In-Progress, Submitted or Completed.
- If you import new transactions (via a cart connection, CSV or API) when the state is marked as Blue (In-Progress/Submitted), Red (Filing Issue) or Green (Completed) on your account's Dashboard, those transactions will be included in the return for the next filing period, but will not be included in the current return.