How do we make qualified customers tax-exempt in HITS?

Purpose 

To outline the procedure for creating a non-taxed sales invoice for a retail cash customer in compliance with company policy and applicable tax laws. This SOP ensures that proper documentation is collected and tax-exempt status is applied appropriately. 

Scope 

This SOP applies to all Service Center Sales Representatives and Accountants involved in retail sales where the customer requests tax-exempt status. 

Policy Summary 

• Sales Representatives do not have permission to change the tax status on customer accounts or individual sales tickets. 
• Tax-exempt status may only be applied after valid documentation is received and verified by the Service Center Accountant. 
• No sales ticket will be processed as tax-exempt unless documentation is provided and approved. 

Required Documentation 

• A valid Tax Exempt Certificate or 
• Applicable documentation from a recognized government agency 

Procedure 

Step 1: Customer Request 

1. Customer requests that a retail sales invoice be made tax-exempt.
2. Politely inform the customer:
      “We are happy to help with that. To process your purchase as tax-exempt, we’ll need a valid tax exemption certificate or applicable government documentation.” 

Step 2: Document Collection 

1. Collect the Tax-Exempt Certificate or required government documentation from the customer.
2. Ensure the document includes:

• •    Customer’s name 
  •    Tax exemption number or reference 
  •    Valid issuing authority 
  •    Expiration date (if applicable) 

Step 3: Submit to Service Center Accountant (SCA)

1. Scan or photograph the documentation clearly.

Send the scanned copy to the SCA via email or designated system, along with:

1. Customer name
2. Contact details
3. Date of request
4. Ticket # of the sale  

 

 

Step 4: Await Validation 

1. Inform the customer:
   “Our accounting team will review the exemption documentation. Once it’s approved, they will update your invoice accordingly.”
2. Do not process the invoice as tax-exempt until confirmation is received from the Service Center Accountant. 

Step 5: Accountant Review and Action (Performed by Accountant) 

The Service Center Accountant will:

•  Review and validate the submitted documentation.
•  If approved, change the tax status on the invoice.
• Notify the Sales Rep that the invoice can now be completed as tax-exempt. 

Step 6: Finalize Sale 

1. Once approval is confirmed, complete the sale using the updated invoice.
2. Provide the customer with a copy of the finalized invoice and thank them.

Important Notes 

• Do not bypass this process under any circumstances.
• Invoices processed without proper documentation may be subject to audit risk and may result in disciplinary action. 
• This procedure applies only to retail cash customers. 

Responsibilities 

• Sales Representatives: Collect and submit documentation; communicate with the customer. 
• Service Center Accountant: Validate tax-exempt documentation and update invoice status. 

Record Keeping 

• Maintain a record of all submitted tax-exempt documentation with the invoice number.
• Retain documents in accordance with company and legal retention policies.