What's the deadline for classifying exempt transactions for an AutoFile return?
Which Report is used to AutoFile my returns?
AutoFile is based on the Expected Sales Tax Due Report, which views all transactions as taxable.
- If any of your untaxed sales were sold to wholesalers, exempt government entities or 'other' exempt entities (such as a charity), you can specifically classify those transactions as exempt using the method outlined in this blog post so the Expected Sales Tax Due Report will exclude those sales.
- If you sell via Amazon, Shopify or you use our SmartCalcs API, you can also classify your exemptions using the Product Categories and Exemptions page. (This feature is currently available for SmartCalcs users and Amazon and Shopify sellers, but we will add support for additional carts soon. Contact TaxJar Support to be notified when we release this feature for other carts!)
When should I classify my exemptions?
Our system begins processing returns on 1st day of the month that your return is due. To ensure your exempt items will be marked as exempt, we recommend classifying all of your untaxed exempt items in your Report as early as possible to be ready when the system begins preparing your return and the report is locked for filing.
- If the state is marked as Yellow (Scheduled) on your Dashboard, the report is currently unlocked and you will still be able to classify exempt transactions for the current return.
- If you classify exempt transactions when the state is marked as Blue (In-Progress/Submitted) or Green (Completed) on your account's Dashboard, those changes will not be applied to the return. Instead, those items will be viewed as fully taxable when your return is AutoFiled and you will pay sales tax on those transactions.
If you do not yet see any of the above icons in the AutoFile tile on your Dashboard, you can still classify exempt transactions for the current month's return.
The image below shows a Dashboard tile for a Report that has not been locked for filing.
- Any exempt items that are classified now will be viewed as exempt for the return filed that month.
If you see a YELLOW clock, the Report has not yet been locked for filing.
- This means that you can still upload classify your exemptions between now and 7pm EST the day before the "Scheduled to be filed and paid by day" you see in that box.
- In the example image below, any transactions that need to be reported as exempt when we file should be classified before 7pm EST on October 7, 2017.
What happens if I don't classify my exempt transactions before the report is locked for filing?
Any transactions that you classify after the Report is locked for filing will be viewed as fully taxable when we AutoFile.
If you see a BLUE clock, the Report has already been locked for filing and your return sent to the state. If you attempt to classify exempt items now, they will not be applied to the return. Any untaxed transactions at this stage will be reported to the state as fully taxable and you'll pay tax on those orders.
If you see a GREEN checkmark, the Report has already been locked for filing and your return has already been confirmed by the state. If you attempt to classify exempt items now, they will not be applied to the return. Any untaxed transactions at this stage were reported to the state as fully taxable.