In the US, sales tax is required for transactions in 45 states and it is imposed only on the end-consumers. There are various organizations and individuals that are exempt from sales tax for various reasons. Tax Exemption Certificates (TEC) are the way in which a business, organization or individual attests that it is a tax-exempt entity, or that it is purchasing an item with the intent to use it in a way that has been deemed exempt from tax.
In these cases, 2Checkout can refund the sales tax to the customer's payment account after the transaction is complete. The refund can be requested by the shopper within 90 days of the purchase by emailing a copy of his Tax Exemption Certificate together with the order details to email@example.com.
Once the initial order is flagged as tax-exempt in our system, all renewals linked to that order will also be tax-exempt as long as the certificate the shopper has provided is still valid at the moment the renewal order is placed.
Subscription support for US Sales Tax exemption is available by default to merchants using the reseller business model (2Monetize), as well as for those merchants using the PSP business model (2Sell, 2Subscribe) for which 2Checkout does the tax calculation.
This renewal behavior will be triggered for all transactions for which the initial tax exemption was processed after July 15th, 2020.