In some situations, you may need to offer tax exemption to a portion of customers (government agencies, resalers, b2b sales, etc) and/or products. You will need to configure the corresponding tax exemption rules to prevent your store from charging taxes on such customers and/or products.

This article describes how to create tax exemptions for both products and customers manually irrespectively of a tax addon you use.

Automated tax exemption can be enabled in the following addons:

Tax-exempt customers

To set up a tax-exempt option for customers manually you’ll need to:

  1. Create a special membership for tax-exempt buyers and assign it to the customers that can order goods tax free - See more info on memberships creation in Managing User Membership Levels

    You will need to divide all your customers into groups and assign a special membership level to each of the groups depending on whether the customer is tax-exempt or not.

  2. Set up the store tax system based on the memberships

    Irrespectively of an addon you use for a manual tax configuration disable the Use the same tax rates for all user membership levels option when setting up taxes and create tax rates based on the memberships used in the store. The tax-exempt membership should have a 0% tax rate applied.

Tax-exempt products

To set up tax-exempt option for products manually you’ll need to:

  1. Create and assign a special tax class for the products that can be purchased tax free - See more info on tax classes creation in Tax Classes

  2. Configure a zero tax rate for the tax-exempt products as described in Configuring rates for tax classes.