Tax-Exempt Customers and Exemption IDs

How to mark a customer tax-exempt with their exemption ID, what happens on their invoices, and why the ID and the certificate — not a checkbox — are what make it real.

A church, a school, a government agency, a reseller, or a customer holding a direct-pay permit does not pay sales tax on your work. Seayora lets you record that on the customer once, with the ID from their certificate, and every invoice to them carries no tax and prints the ID.

Marking a customer tax-exempt

On an invoice, after typing the customer's email, use "Customer is tax-exempt? Add their exemption ID". Pick the kind (exempt organization, government, resale, direct pay), enter the ID, the issuing state and — if the certificate has one — its expiry.
Or, in Accounting → Invoicing & Bills → Customers, set the same on the books customer for invoices raised there.
On the phone, an invoice to an exempt customer shows the exemption under their email; marking one exempt is done on the web, where the certificate is.

A new invoice with the customer’s email, ops@harborline.example.com, typed in: under it, the exemption form opened from “Customer is tax-exempt? Add their exemption ID” — the kind of exemption, the ID from their certificate, the issuing state, an optional expiry and form code, and Mark tax-exempt. The ID, the state and Mark tax-exempt are ringed. — Type the customer’s email, open “Customer is tax-exempt?”, pick the kind of exemption, then 1 the ID from their certificate, 2 the issuing state, and 3 Mark tax-exempt.

What the ID does

Saving the exemption creates the certificate record the tax engine actually reads. The invoice then shows "no tax" with the reason and the ID, the receipt and PDF carry the same, and the sale lands on your sales-tax worksheet as exempt with the ID beside it — which is exactly what the state asks for when it audits an exempt sale. An exemption with no ID is refused, because an exempt sale you cannot document is a taxable sale you failed to collect on.

Expiry and revocation

A certificate with an expiry stops applying on that date; invoices after it are taxed again. Removing the exemption from the customer revokes their blanket certificates but keeps the record — invoices already issued under it relied on it. A capital-improvement certificate is different: it belongs to one job, is filed under Tax settings → Exemption certificates, and never becomes a blanket exemption for the customer.

Frequently asked questions

The customer says they are exempt but has no certificate.

Then, for sales-tax purposes, they are not. Ask for the form their state issues (an ST-119.1 in New York, for example); until it is on file, charge the tax.

Does an exempt customer make a capital improvement exempt too?

A blanket exemption covers all their purchases from you. A capital-improvement certificate is separate and per job; a customer who is not otherwise exempt still needs one for the improvement to bill without tax where the state requires it.

Related guides

Related features and guides

Tax Settings: Registrations, Rates & Exemption Certificates — Documentation. Telling Seayora where you are registered to collect, collecting wherever a job is, filing exemption certificates, and reading each state's rule.
Invoices, Receipts & Sales Tax for Contractors — Documentation. How a contractor invoice is built in Seayora, how sales tax is worked out for the job site line by line, what the customer sees at checkout, and when a receipt is issued.
Parts & Materials: What Gets Taxed and What Does Not — Documentation. The parts catalog, why "tax paid at purchase" matters, what buying on a resale certificate changes, use tax, purchase-tax credits, and the parts tax report.
Pricing Tiers, Tax Quotes & Receipt Capture — Feature. Configurable pricing tiers, tax quoting, late fees, promo redemption, PDF invoices, and OCR receipt scanning that turns a photo into a booked expense.
Sales Tax Basics for Contractors and Service Businesses — Guide. When contractors charge sales tax: how states treat repairs, capital improvements and materials, what nexus means, and the exemption certificates to keep.
Timesheets & Labor Tracking — Feature. Technicians clock in and out against a job, hours flow into job costing and invoicing, and you see real labor cost per job instead of an estimate.