Not want to charge Sales Tax to B2B customers with Resale Certificate on file

Accounting & Taxes

Topic summary

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:

  • Users successfully resolved tax exemption issues by switching from Manual Tax to Basic Tax and integrating Avalara
  • Critical requirement: Use “b2b:” prefix before the company location ID (not customer ID) in Avalara’s Customer Code field
  • Email addresses must match between Avalara and Shopify accounts
  • Create tax-exempt customers in Avalara before creating them in Shopify
  • Must upload separate resale certificates for each state where customers ship
  • No official documentation exists for this process; solution discovered through trial and support sessions

Recent Platform Update:
Shopify now offers three tax collection options at the company/customer level:

  • Collect tax
  • Don’t collect tax
  • Collect tax unless exemptions apply

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.

Summarized with AI on November 2. AI used: claude-sonnet-4-5-20250929.
28

Brutal. I’m sorry you’re experiencing these issues with sales tax calculations. The order of operations is important. I suggest creating the customer’s Avalara entry before creating a sales/draft order in Shopify. Reversing this order usually results in the tax-exempt status failing.

If you’re already following this process, my only suggestion is to continue working with Shopify Support.

1 Like