How to Mark a Customer Tax Exempt in QuickBooks Online

For Intuit's automated sales tax, with or without the CereTax app:

• New customer: add and mark it tax exempt.
• Existing customer: edit and mark it tax exempt.
• CereTax app: read the tax, or add a state or tax type rule.

If You Add a New Customer

1. Go to All apps, then Customer Hub, then Customers & leads, and select New customer.
2. Enter the required Customer display name and any other important customer info.
3. In the Additional info section, select the checkbox This customer is tax exempt.
4. Select a reason in the Reason for exemption dropdown.
5. Select Save.
6. Create an invoice for the customer. If the CereTax app calculates your tax, read the result as the CereTax section describes. If Intuit's automated sales tax calculates it, read the total sales tax above the total amount. For a tax-exempt customer on that setup, QuickBooks may still need to calculate tax in some cases, since rules vary by location. If the sales tax amount looks incorrect, check the customer's ZIP code, each item's sales tax category, and that the customer is marked tax exempt.

If You Change an Existing Customer

1. Go to All apps, then Customer Hub, then Customers & leads, select the customer's name, and select Edit at the top.
2. In the Additional info section, select the checkbox This customer is tax exempt.
3. Select a reason in the Reason for exemption dropdown.
4. Select Save.
5. Create an invoice for the customer. If the CereTax app calculates your tax, read the result as the CereTax section describes. If Intuit's automated sales tax calculates it, read the total sales tax above the total amount. For a tax-exempt customer on that setup, QuickBooks may still need to calculate tax in some cases, since rules vary by location. If the sales tax amount looks incorrect, check the customer's ZIP code, each item's sales tax category, and that the customer is marked tax exempt.

If the CereTax App Calculates Your Tax

You manage the exemption on the customer record in QuickBooks. A portal rule limits an exemption to some states or tax types.

1. Save a transaction for the customer in QuickBooks, close it, and reopen it. The CereTax QuickBooks Online app calculates tax each time you save a QuickBooks document.
2. Read the tax. When the app adds tax, it appears as one or more lines on the transaction or in the native Tax field. Which one depends on how your integration is configured.
3. In the CereTax portal, open the transaction under Transactions > Sales, and click the down arrow on a line item. Read the Rules tab, which lists the rules that applied to that line. Read the Exemptions tab, which shows the jurisdiction and tax type exempted.

If the Account Also Uses Intuit's Automated Sales Tax

An account on Intuit's automated sales tax must set the app to Apply tax as an individual line item on invoices, in the app's Integration settings. The app then adds one line with the total tax for each applicable tax type. The app overrides the automated sales tax calculation, and the updated tax amount appears after you close and reopen the document. For the app's tax amount to stay on the document, at least one line must be marked Tax = true. A $0 tax amount stays in QuickBooks if at least one line is taxable.

Add a Rule for Some States or Tax Types

1. In the CereTax portal, go to Rules > Manage Rule Types, select the Profile, and select + Add Rule Type. Name the rule type, such as Customer Exemption, set Rule Level to Invoice Line, and select Create Rule Type. Select its Edit icon, and drag customerAccount to the Criteria Elements Table. Drag taxExemptionCodes.state, taxExemptionCodes.taxLevel, taxExemptionCodes.taxType, and taxExemptionCodes.reason to the Action Elements Table, and select Save Elements. With more than one Profile, repeat these steps for each Profile that needs the rule type.
2. Go to Rules > Manage Rules, select the Profile, and select + Set-up New Rule. Enter a rule name, the start and end effective dates, and the rule type you created, and set Status to Active. With more than one Profile, repeat the rule steps for each Profile that needs the rule.
3. Add the criteria: set Criteria Element to customerAccount and Operator to equals, and enter the customer's value. The value must exactly match the value your system passes in the Customer Account field. The app maps the QuickBooks field Customer Name to customerAccount and accepts the first 50 characters.
4. Add the actions. Set taxExemptionCodes.state to the states the exemption covers. For an exemption that covers all taxes, we recommend setting taxExemptionCodes.taxLevel to the levels it covers. You do not need a taxExemptionCodes.taxType action. For specific taxes, omit taxLevel and use taxType instead, such as 130 - SALES TAX. In some cases you may need both. To record a reason, add taxExemptionCodes.reason, such as Resale. The reason appears on your CereTax reports. Select Create Rule.
5. Save a transaction for the customer, dated inside the rule's start and end effective dates. Close it, reopen it, and read the tax.

For every field and button, follow the full portal steps. If the rule does not apply, see why a rule is not applying or email support@ceretax.com.

Keep the Certificate

For sales to tax-exempt organizations, Intuit's advice is to get a copy of the buyer's tax-exempt number or certificate.

To keep a copy in QuickBooks Online, attach the file to the customer profile through the Customer Details tab, then Attachments.

Next Step

We do not cover who qualifies for an exemption, whether a certificate is valid, or manual sales tax rates. For certificates, see SmartExempt, our exemption certificate management product. To ask us about your exemption setup, contact CereTax.

Sources

• Intuit, Add and manage customers in QuickBooks Online
• CereTax, CereTax + QuickBooks Online
• Intuit, Default customer sales tax rate in QuickBooks
• CereTax, How to Set-up Customer Exemptions (CereTax knowledge base, Portal > Rules)
• Intuit, Learn how QuickBooks automatically calculates sales tax
• Intuit, Add a sales tax category to products and services
• CereTax, QuickBooks Online - Install & Setup (CereTax knowledge base)
• CereTax, Transaction Detail (CereTax knowledge base, Portal)
• CereTax, QuickBooks Online - FAQ (CereTax knowledge base)
• CereTax, Why is my rule not applying as expected? (CereTax knowledge base, Portal)
• Intuit, Understand and set up sales tax exemptions in QuickBooks
• Intuit, Add or delete attachments in QuickBooks
• CereTax, Exemption Certificate Management Software: What It Does and How to Choose It
• Intuit, Edit customer info in QuickBooks Online

Reviewed October 21, 2026. We review this page again within 90 days.