Merchants need to exempt B2B customers with resale certificates from sales tax while charging B2C customers normally. Initial solutions suggested using the “Collect tax” checkbox in standard customer accounts, but users reported this doesn’t work with Shopify Plus B2B company profiles.
Avalara Integration Workaround:
Recent Platform Update:
Shopify now offers three tax collection options at the company/customer level:
This feature appears available since API version 2025-01, though documentation remains limited. Users outside the US may experience different behavior, particularly with federal tax components that cannot be exempted on B2B orders.
Hello community,
our shop is mainly for B2C customers.
However I would also love to handle our B2B clients over our store and enable them to put their orders in right here as well.
However for many of those we would get a Resale Certificate from them which means we would NOT need to charge them sales tax as they are resellers.
Is there a way to set the store in a way that we charge standard sales tax to B2C clients but not to B2B clients?
Thank you so much for any feedback!
Hi @PrioRim ,
Thank you for getting in touch. You should be able to do this by making your B2B customers exempt from tax in the Customers section of the Shopify admin. When you create a customer account, you’ll see a “Collect tax” option which you can leave unchecked:
Once the profile has been created, your customer will just need to log into this account when making a purchase and they should not be charged tax at checkout. I would recommend creating a page on your store re: wholesale and B2B orders, and encouraging potential customers to contact you directly so you can create a tax-exempt customer profile for them.
Alternatively, there are also a wide variety of wholesale apps that can help make your store suitable for both B2C and B2B customers. You can check out the different ones on offer and see what sort of features are offered and whether they’d be suitable for you and your business.
The B2B company profiles Tax Exemption feature doesn’t work and I confirmed with a Shopify Plus support staff. The only way to have tax exemption at the moment is using the standard customer accounts and tax exempt option.
Looking for this feature as well. Has B2B team provided any updates?
I concur that this does not work for B2B customers. We have tax exemptions set up for B2B companies, customer logins assigned to locations for the companies, and when they checkout they are being charged tax. Shopify can you investigate and fix this?
Has this been resolved? One of the reasons we just upgraded to Shopify Plus was the B2B functionality. I have companies trying to complete transactions and it’s charging them tax. I know we can set the tax at the customer level but that defeats the purpose of the B2B functionality. I can’t imagine this was overlooked??
It appears this issue still needs to be fixed. We use Avatax to calculate sales tax. However, B2B tax-exempt accounts are broken, and sales tax is always charged. Plus, there is no documentation related to Shopify Plus B2B and Avatax.
The only workaround I’m aware of is deleting the B2B account and using the personal account to avoid your customer being charged sales tax.
I’m all ears if anyone has found another workaround or fix for this issue.
We were able to resolve this by switching from Manual Tax to Basic Tax in Shopify. We use Avalara in conjunction with Basic Tax and everything is working as expected now for our B2B customers. Make sure you add the Companies Tax ID and the state its associated with in the tax exemption settings.
Thank you. It appears Shopify fixed our issue, and AvaTax is working as intended.
We’re running into this exact issue right now. Are you saying that even though you have updated the B2B customer’s “Customer Code” in Avalara with their Company Location ID, you still need to add the company Tax ID and State on their Company profile under the “Manage tax exemptions” field? Thanks
If the customer isn’t associated with a B2B Company Profile in Shopify, you add their Shopify customer ID to the Customer Code field in Avalara.
If the customer is associated with a B2B Company Profile, add the company location ID to Avalara with the “b2B:” prefix. If a B2B Company in Shopify has multiple locations, you need to create a unique entry in Avalara for each location.
Example: b2b:6582545824 is entered into the Customer Code field in Avalara.
Appreciate all of your insight here @SGUSAMIKE . As mentioned, if you use Avalara you need to add the b2b: prefix before the location ID. Just adding for context here in case anyone has this issue in the future - we have one specific customer account that was having an issue which we were only troubleshooting on that account. Make sure when doing testing you test on numerous accounts - we are now resetting that one problematic account back up.
This is way too ridiculous. It’s 2024 now and this issue still persists. We were almost on the go-live phase on our Plus account and it turns out the tax exemptions are not working for B2B customers. The support guy is still giving the same lame excuse to use PERSONAL ORDERS instead of B2B orders which is a joke in it’s own self.
This thread is already 2 years old and no fix so far. What’s the point of giving the option to not collect tax and even tax exemption on company locations when it won’t freaking work.
This being said, has anyone been able to find a workaround or any app for this? This is very essential for our business logic as we want some of our B2B customers to be tax exempt.
Did you have a chance to review the B2B location instructions for Avalara further down in the comments thread?
If the customer isn’t associated with a B2B Company Profile in Shopify, you add their Shopify customer ID to the Customer Code field in Avalara.
If the customer is associated with a B2B Company Profile, add the company location ID to Avalara with the “b2B:” prefix. If a B2B Company in Shopify has multiple locations, you need to create a unique entry in Avalara for each location.
Example: b2b:6582545824 is entered into the Customer Code field in Avalara.
Thanks for the direction. However, we are not using Avalara. We are on basic Shopify tax system. 
@SGUSAMIKE were you able to make this work using Avalara? Please suggest? As SHOPIFY docs say Avalara does not support tax exemptions on this link: https://help.shopify.com/en/manual/taxes/tax-services/activate#considerations-for-using-avalara
Yes. We can support tax exemptions using Avalara. However, there were plenty of pain points setting this up. NO documentation from Shopify or Avalara informs you about the “b2b:” prefix requirement or the necessity to add the B2B location ID instead of the customer’s ID. It took several hours and multiple sessions of customer service requests between Shopify and Avalara support to figure this out.
I’m still not a fan of Avalara because their prices are high, and you must pay an extra “connection fee” to integrate Shopify Plus with Avalara. But, to be fair, collecting sales tax from dozens of states is a major pain point.
I still can’t get this to work, and the steps below are what I’ve tried.
Am I missing something here?
I’m unsure why it’s not working without seeing your exact process and circumstances. Do you have the Shopify “Avalara AvaTax” app installed in your store?
Yeah, I cannot figure it out either, so I will give it until tomorrow to see if it takes time to propagate.
As for Avalara being installed, it is installed and is showing live.
