--- title: "Mark a customer tax-exempt in QuickBooks Desktop" description: "Some customers — resellers, nonprofits, government buyers — don't pay sales tax. The TaxCloud QuickBooks Plugin reads QuickBooks' built-in customer tax setting and tells TaxCloud when a customer is exempt, so their sales come back at $0 tax automatically. This article covers how to mark a customer exempt and how their exemption certificates are recorded." canonical_url: "https://support.taxcloud.com/articles/mark-a-customer-tax-exempt-in-quickbooks-desktop-zo7zb1LeKW" md_url: "https://support.taxcloud.com/articles/mark-a-customer-tax-exempt-in-quickbooks-desktop-zo7zb1LeKW.md" --- # Mark a customer tax-exempt in QuickBooks Desktop Some customers — resellers, nonprofits, government buyers — don't pay sales tax. The TaxCloud QuickBooks Plugin reads QuickBooks' built-in customer tax setting and tells TaxCloud when a customer is exempt, so their sales come back at $0 tax automatically. This article covers how to mark a customer exempt and how their exemption certificates are recorded. ## How customer exemption works QuickBooks Desktop gives every customer a **Tax Code** with two built-in values: * **Tax** — the customer pays sales tax. * **Non** — the customer does not. The plugin reads this field on every transaction. When a customer is set to **Non**, it sends an exempt flag to TaxCloud, which then: * Returns **$0 tax** on the sale, and * Still **records the sale for filing** — most states require you to report exempt sales even though no tax is due. Set a customer to **Non** once, and every future transaction for them is zeroed out automatically. ## Mark a customer exempt 1. Go to **Customers → Customer Center**. 2. Double-click the customer to open their record. 3. Open the **Sales Tax Settings** tab. 4. Set **Tax Code** to **Non**. 5. (Optional) Enter their **Resale Number** for your own records. The plugin doesn't send this to TaxCloud, but it's useful at audit time. 6. Click **OK**. ![Customer record Sales Tax Settings tab with Tax Code set to Non](https://support.taxcloud.com/api/attachments.redirect?id=baf64043-2a9f-4189-98cd-e5bc45e05b85 " =1626x1362") :::info **Already have open invoices for this customer?** Invoices saved while they were set to **Tax** keep their original tax. Open each one and click **Save** again — the plugin recalculates against the new exempt setting and removes the tax line. ::: ## What the exempt setting covers The **Non** flag is all-or-nothing: it applies to every transaction the plugin syncs (invoices, sales receipts, credit memos) and zeroes out every line. It does **not** handle: * **Per-state exemption** — a reseller exempt in California but not New York. * **Per-reason exemption** — resale vs. nonprofit vs. government. * **Per-product exemption** — exempt on some items but not others (that's a product-taxability question — see **[Assign product tax codes (TICs)](https://support.taxcloud.com/en-us/articles/assign-product-tax-codes-tics-in-quickbooks-desktop-KPkDQ5U14K)**). For anything more nuanced than "this customer never pays tax on anything," use a certificate-managed exemption in the TaxCloud dashboard (below). ### Need tax to apply for just one sale or state? * **Temporarily switch** the customer's Tax Code to **Tax**, save the transaction, then switch back. The plugin reads the current value at save time. * Or **use a separate customer record** (e.g. a "Walk-in Customer" set to **Tax**) for those sales. ## Exemption certificates in TaxCloud An exemption certificate is the document proving a customer qualifies. TaxCloud keeps a record of it so you have one source of truth at audit time. **Match the customer identifier.** For a certificate to apply to this customer's QuickBooks sales, it must be filed in TaxCloud under the **same customer ID the plugin sends**. The plugin's **Customer Reference** setting controls which QuickBooks value that is (ListID, Account Number, or Name) — see **[Settings reference](https://support.taxcloud.com/en-us/articles/taxcloud-quickbooks-plugin-settings-reference-Y5hZd8YLYm)**. Use that same value as the customer identifier when you add the certificate. ![The plugin's Customer Reference setting: ListID, Account Number, or Name](https://support.taxcloud.com/api/attachments.redirect?id=aa86c17b-e98b-426e-a2f1-06741c6b077b " =1932x314") To add a certificate, follow [Add an exemption certificate in TaxCloud](https://support.taxcloud.com/en-us/articles/how-to-add-an-exemption-certificate-to-taxcloud-xfuUNu2Qnq?region=NG). You'll provide the state it covers, the exemption reason, and the validity dates. TaxCloud records the certificate's information for audit and compliance reporting (it doesn't store the uploaded file itself). ## Troubleshooting **Tax still shows after I set the customer to Non.** * Confirm you saved the customer record (**Edit Customer → OK**). * The invoice may have been saved before the change — open it and click **Save** again to recalculate. * Open the **Capture History** tab in the plugin's Settings window to see whether the invoice was captured. The debug log (see **[Troubleshooting](https://support.taxcloud.com/en-us/articles/troubleshooting-the-taxcloud-quickbooks-plugin-aKbKmVr8SO)**) shows whether the exempt flag was sent. **TaxCloud zeroed out tax, but I expected tax in one state.** The QuickBooks **Non** flag is global. Either use a separate customer record for that state, or keep the customer on **Tax** and manage a per-state certificate exemption in the dashboard. **A customer is only sometimes exempt (e.g. occasional resale).** Keep their default Tax Code as **Tax** and switch to **Non** only for the exempt transactions — switch back after saving.