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Managing Exemption Certificates

Leveraging industry-leading technology, TaxConnex adds a managed service offering for a level up in your exemption certificate management

 

 

Maintaining current, valid exemption certificates is critical in managing your overall sales tax risk. 

Under audit, an otherwise exempt sale will be deemed taxable without a current, valid exemption certificate. Results from a sample of invoices can be extrapolated across the audit period and a few missing certificates can result in large assessments including penalties and interest. Implementing a process to gather, validate and manage tax exemption certificates is necessary for many businesses.

With TaxConnex® exemption certificate management, you’re able to give this time-consuming task to an expert to manage. Combining technology and innovation with human expertise and oversight, this service offering supports multiple exemption types including resales exemptions, telecom tax exemptions, government exemptions, non-profit exemptions, manufacturing exemptions, and more.  

TaxConnex's managed service offering includes:  

  • Review all new certificates for validity

  • Index certificates and supporting documentation for easy access

  • Verify permit number provided in your certificates, where available

  • Monthly reporting with data identifying customer with invalid, missing or expired certificates

  • Managing the expiration cycle; proactively identifying expiring certificates and notifying you, and your customer, of the need to update exemption certificates

Ready to rely on the experts to conquer the chaos of sales tax? Level up your exemption certificates management by working with TaxConnex!

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FAQs for Managing Exemption Certificates for Your Business

  • What is exemption certificate management?

    Exemption certificate management is the process of collecting, validating, storing, and maintaining exemption and resale certificates from customers to support tax-exempt sales. Proper management ensures you can substantiate exemptions and reduce audit risk. 

  • Do I need exemption certificate management?

    Yes.
    If your business accepts exemption or resale certificates, you need a process to ensure they are complete, valid, and up to date. Without proper management, you may be held liable for uncollected sales tax. 

  • What are the consequences of missing or invalid exemption certificates?

    Missing, incomplete, or expired exemption certificates can lead to auditors disallowing exempt sales. As a result, your business may be assessed for unpaid sales tax, along with penalties and interest, even if the customer should have qualified for the exemption. This is one of the most common and costly issues identified during a sales tax audit. 

  • Can software manage exemption certificates for me?

    Not completely.
    Software and AI can help store certificates and begin the validation process, but they do not fully manage exemption certificate compliance. Businesses are still responsible for handling exceptions, resolving incomplete or unclear documents, and ensuring certificates meet state-specific requirements. Many companies combine technology with expert support to manage these complexities effectively. 

  • Does TaxConnex provide exemption certificate management services?

    Yes.
    TaxConnex provides managed exemption certificate services, including collection, validation, storage, and ongoing maintenance to help ensure your exempt sales are properly documented and audit-ready.