Exemptions remove tax liability from a jurisdiction. An exemption should be used when you have an exemption certificate that allows you to be exempted from certain taxes for a given jurisdiction or group of jurisdictions.
Communications REST v2 provides different types of exemptions:
| Type | Description |
|---|---|
| Category Exemption | Exemptions applied by tax category Provide the Category ID (cat) and the location (loc) |
| Tax Type Exemption | Exemptions applied to a specific tax type, tax level, and jurisdiction (if needed) Provide the tax type (tpe) and tax level (lvl). Specify the location (loc) if applicable to a specific jurisdiction. |
| Jurisdiction Tax Rule Exemption | Exemptions applied automatically by the AFC Tax Engine based on characteristics of the transaction |
For more information, see Exemptions.
Exemption fields
Exemption fields by exemption type:
| Field | Category Exemption | Tax Type Exemption |
|---|---|---|
Tax Type (tpe) | X | |
Category ID (cat) | X | |
Jurisdiction (loc) | X | X |
Exempt Non-Billable (exnb) | X | X |
Scope (scp) | X | X |
Domain (dom) | X | X |
Force Level Exemptible (frc) | X |
For more information, see Exemptions.
Scope
Scope (scp) defines the tax levels you want the tax or category of taxes to be exempted (where the exemption to be applied). The field is a combination of one or more of these values (add the appropriate values together):
128: Federal256: State512: County1024: Local
For example:
| Scope | Description |
|---|---|
| 1920 | Federal (128) + State (256) + County (512) + Local (1024) |
| 1792 | State (256) + County (512) + Local (1024) |
| 384 | Federal (128) + State (256) |
| 128 | Federal (128) |
Domain
Domain (dom) defines the level at which the taxing jurisdiction much match the exemption jurisdiction at in order to be applied. The domain doesn’t need to correlate to the tax level of the tax being exempted.
The domain is set to one of these values:
0: Federal1: State2: County3: City
If the domain is set to State (1), then the location passed in with the exemption must match the taxing jurisdiction at the state level.
For example:
| Domain | Exemption Location | Taxing Jurisdiction | Result |
|---|---|---|---|
Federal (0) | New York, NY, USA | San Francisco, CA, USA | Exemption applied New York and San Francisco are in the same country so they match at the federal level |
Federal (0) | New York, NY, USA | Toronto, ON, Canada | Exemption not applied New York and Toronto are in different countries so they don't match at the federal level |
State (1) | New York, NY | Ithaca, NY | Exemption applied New York and Ithaca are in the same state so they match at the state level |
State (1) | New York, NY | San Francisco, CA, USA | Exemption not applied New York and San Francisco are in different states so they don't match at the state level |
County (2) | Fort Lauderdale, Broward County, FL | Hollywood, Broward County, FL | Exemption applied Fort Lauderdale and Hollywood are in the same county so they match at the county level |
County (2) | Fort Lauderdale, Broward County, FL | Miami, Dade County, FL | Exemption not applied Fort Lauderdale and Miami are in different counties so they don't match at the county level |
Local (3) | Fort Lauderdale, Broward County, FL | Port Everglades, Broward County, FL | Exemption applied Port Everglades is part of Fort Lauderdale and they have the same PCode so they match at the local level |
Local (3) | Fort Lauderdale, Broward County, FL | Hollywood, Broward County, FL | Exemption not applied Fort Lauderdale and Hollywood are different local jurisdictions so they don't match at the local level |
Exempt Non-Billable
Exempt Non-Billable (exnb) defines if non-billable taxes can be exempted.
true: Non-billable taxes can be exemptedfalse: Non-billable taxes cannot be exempted
Force Level Exemptible
The Force Level Exemptible flag (frc) override level exempt flag on wildcard exemptions
true: Wildcard exemptions exempt taxes tagged as not level exemptiblefalse: Wildcard exemptions exclude taxes tagged as not level exemptible from consideration
Jurisdiction Tax Rule Exemption
A Jurisdiction Tax Rule Exemption is applied automatically based on the taxing jurisdiction and the taxes returned. For example:
- First $25 of a Texas Internet transaction
- Safe Harbor Override applied to VoIP or Cellular transactions
Exemption Example
This example demonstrates:
- "Sales and Use" category (
catis 1) exemption within North Carolina - Tax type 44 (
tpeis 44) exempted with a domain of State(domis 1)
{ "cmpn": { "bscl": 1, "svcl": 0, "fclt": true, "frch": true, "reg": false }, "inv": [ { "bill": { "ctry": "USA", "st": "NC", "city": "Durham", "zip": "27701", "int": true }, "cust": 1, "lfln": false, "date": "2018-02-01T12:00:00Z", "exms": [ { "loc": { "ctry": "USA", "st": "NC" }, "cat": 1 }, { "loc": { "pcd": 2757800 }, "tpe": 44, "dom": 1 } ], "itms": [ { "ref": "Exemption Example", "chg": 100, "line": 0, "sale": 1, "incl": false, "tran": 13, "serv": 6, "dbt": false, "adj": false } ], "invm": true, "dtl": true, "summ": false } ]}Response
Tax Type (tid) 231 is exempted because of the category exemption. Tax Type (tid) 44 is exempted because of the tax type exemption.
{ "inv": [ { "itms": [ { "ref": "Exemption Example", "txs": [ { "bill": true, "cmpl": true, "tm": 0, "calc": 1, "cat": "SALES AND USE TAXES", "cid": 1, "name": "North Carolina Telecommunications Sales Tax", "exm": 100, "lns": 0, "min": 0, "pcd": 2716900, "rate": 0.07, "sur": false, "tax": 0, "lvl": 1, "tid": 231 }, { "bill": true, "cmpl": true, "tm": 0, "calc": 2, "cat": "CONNECTIVITY CHARGES", "cid": 5, "name": "Telecom Relay Surcharge (Wireless)", "exm": 0, "lns": 0, "min": 0, "pcd": 2716900, "rate": 0.1, "sur": true, "tax": 0.1, "lvl": 1, "tid": 175 }, { "bill": true, "cmpl": true, "tm": 0, "calc": 2, "cat": "E-911 CHARGES", "cid": 7, "name": "E911 (Wireless)", "exm": 0, "lns": 0, "min": 0, "pcd": 2716900, "rate": 0.6, "sur": false, "tax": 0, "lvl": 1, "tid": 44 }, { "bill": true, "cmpl": true, "tm": 37.1, "calc": 1, "cat": "CONNECTIVITY CHARGES", "cid": 5, "name": "Fed USF Cellular", "exm": 62.9, "lns": 0, "min": 0, "pcd": 0, "rate": 0.195, "sur": false, "tax": 7.234500000000001, "lvl": 0, "tid": 55 }, { "bill": true, "cmpl": true, "tm": 100, "calc": 2, "cat": "REGULATORY CHARGES", "cid": 6, "name": "FCC Regulatory Fee (Wireless)", "exm": 0, "lns": 0, "min": 0, "pcd": 0, "rate": 0.016667, "sur": false, "tax": 0.016667, "lvl": 0, "tid": 170 } ] } ] } ]}See Category Exemptions and Tax Type Exemptions for more examples.