Creating a Tax-Exempt Customer Group

Some customers, like wholesalers and governmental agencies, can be exempt from tax laws. You can use customer groups to allow these kinds of customers to check out of your store without having tax applied to their order.

Typically, organizations need to provide documentation attesting to their tax-exempt status. Check with a local tax professional regarding rules and regulations surrounding tax exemptions before enabling tax-exempt customer groups on your store.

This feature (customer groups and segmentation) is available on select BigCommerce plans. Having a tax-exempt customer group requires taxes to be calculated manually in your store's Tax Settings. Automatic tax calculation is not supported with customer groups. If you need automatic tax calculation and customer segmentation, we recommend using Avalara.

 

Did you know? If you have an Avalara account, you can assign Tax-Exempt Categories to customers individually or in bulk via a CSV import.

In the following examples, we'll create two customer groups — one for Retail, which will be taxed, and another for Tax-Exempt, which won't be taxed.

Creating a Retail Customer Group

First, we'll create the taxable group and make it so all new customers who sign-up for an account, or choose to create one during the checkout process, will be charged tax.

 

Did you know? You can disable guest checkout to force your customers to create an account on your store. See Checkout Settings for more information.

1. Go to CustomersCustomer Groups and click Create a Customer Group.

2. Name the group Retail.

3. Check the box marked All new customers should be added to this group.

"Group name" and "All new customers should be added to this group" highlighted on the Create a Customer Group screen

4. Save your changes.

Creating a Tax-Exempt Customer Group

Next, we'll create a group for customers who we don't want to charge tax. In the last section, we made it so all new accounts are automatically added to the taxed Retail group, so any customers we want to include in the Tax-Exempt group will have to be manually added from the control panel, or in bulk via a Customer Import.

1. Click Create a Customer Group, again.

2. Name the group Tax-Exempt.

3. Save your changes.

Configuring a Retail Tax Zone

Now that we've got our customer groups created, we'll configure which group(s) to apply tax to. This is done in your Tax Zone settings.

1. Go to Store Setup › Tax and click the Tax Rates & Zones tab.

2. Click ActionEdit Settings on the applicable tax zone.

3. Scroll to the bottom of the page. For Tax Zone Applies to, select Only customers in these groups.

4. Check the box marked Retail. Save your changes.

"Tax Zone Applies to" setting set to only apply to the "Retail" customer group

Customer Groups for Guests

To ensure customers checking out as a guest are charged the proper taxes, we need to define a Customer Group for Guests. Since customers who checkout as a guest don't have a store account (and therefore don't yet belong to any particular customer group), this setting informs checkout to treat these guest customers as if they were in the Retail customer group.

1. Go to CustomersCustomer Groups.

2. From the drop-down box next to Customer Group for Guests, select Retail.

Customer Group for Guests setting highlighted with "Retail" selected

3. Click Ok to save your changes.

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