Chapter 4.3.4 - Exemptions

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

Category exemptions and tax type exemptions can’t both be included within the same single exemption, but can be applied simultaneously within a list of exemptions.

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: Federal
  • 256: State
  • 512: County
  • 1024: 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: Federal
  • 1: State
  • 2: County
  • 3: 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 lev