As of version 1.3.1, our WooCommerce plugin now supports product taxability to handle exemptions for categories like clothing or food and grocery. To exempt products, you'll first need to create a custom tax class under WooCommerce > Settings > Tax. Next to “Additional tax classes” there’s a box where you can type in a new tax class. To set up a clothing tax class, add “Clothing - 20010” on a new line:
20010 is the clothing product tax code passed to our sales tax API for exemptions. If your products belong in another category, you can find a list of categories and tax codes we support here: https://developers.taxjar.com/api/reference/#categories
Once you add a new tax class, make sure your products are assigned to the new tax class. When editing a product, change the tax class to “Clothing - 20010” under the General tab and save it:
If you need fully exempt products from sales tax, set the "Tax status" dropdown to "None".
You can also exempt specific customers from sales tax by setting the customer as VAT/Tax Exempt using another plugin that adds this functionality to WooCommerce.
For additional help configuring your catalog for product exemptions, please contact us.