Shopify Plus: Configuring Avalara to Honour Shopify’s Tax Settings
From my research, it is a known issue that some merchants may notice that taxes are being added to the total of their draft orders, even when taxes have been disabled on the draft or the customer is tax-exempt.
There are two solutions Shopify has noted so far that I’m pasting below with screenshots. Have you tried these in the past?
Within Avalara’s settings, merchants can enable the Exemption Certificate Management system (ECMS). This option uses Avalara’s own exemption taxes and ignores everything else.
To use Shopify’s exemption settings
Log in to your Avalara account and go to Settings. Click “all settings”.
Go to “Advanced account settings” at the bottom of the page.
Once there, set the settings for Exemption certificate handling to Always exempt by invoice information, ignore certificate records. This option can vary depending on the version of Avalara that the you are using.
The old user interface will look like this:
The more recent one will look something like this:
Regardless of the version, ensure to choose the Ignore as seen on the first screenshot or, always exempt by invoice information, ignore certificate records.
Setting up customers in Avalara
You may be able to get the customers on your orders to be recognized by Avalara by setting up a customer profile for them in their Avalara account that matches the one in your Shopify Admin. First, log in to your Avalara account and navigate to their customer page.
From there you can either select an existing customer profile you are trying to make exempt or make a brand new one for any customer they don’t already have a profile for.
In a separate tab/window, go to your Shopify admin and go to the customer profile for the customer you are trying to exempt (the customer needs to already have a profile on your store for this to work). Once there, you need to copy the customer’s ID number out of the URL for their profile. You can find it here:
Paste that into their customer profile on their Avalara account in the “customer code” box like the below:
Once that is done, save the customer and make sure the exemption certificate for that customer is on file for their profile. The customer should be able to be tax-exempt from here on out. If not, then use the first option option to use Shopify’s exemptions.