How to file as tax exempt for US customers

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Learn what Klaviyo requires to approve requests for tax exemption for customers purchasing an email plan.

Klaviyo charges sales tax on email payments for US customers to comply with state laws; however, businesses and organizations that meet specific criteria may be tax-exempt. Customers who provide valid, accurate, and timely indication of their tax-exempt status will not be charged sales tax by Klaviyo. 

Who qualifies as tax exempt

Tax exemptions vary by state and local jurisdiction, but are generally based on one of three reasons:

1. Product
Klaviyo is considered a Software as a Service (SaaS) product. Depending on the state and jurisdiction that you are in, SaaS may or may not be deemed as a taxable product. As such, Klaviyo determines whether subscription fees are taxable based on customers’ locations of purchase and use of the product.
2. Intended use of the product
This exemption typically refers to products that are intended to be re-sold. These transactions are usually tax-exempt because the reseller will charge sales tax when the items are purchased by the end-user.
3. Status of the buyer
Some nonprofit organizations and government agencies are not required to pay sales tax. Rules for tax exemption for these organizations vary by state, so be sure to check your local laws to see if you qualify. Exemption for most nonprofits requires that the purchase is related to their charitable mission.

File as tax exempt

If you believe your organization is tax exempt, you will need to provide proof via relevant documentation. This documentation will vary depending on the state in which you are located, so it's important to reference state laws (often listed on a state's Department of Revenue website) before submitting your request.

To file for exemption, scan and email all relevant documentation to [e-mail].

Please include the following information in your email:

• Your company name
• Your billing address
• A copy of your most recent invoice
• Valid, accurate, and timely proof that you are exempt from sales tax in your place of business. This will include a certificate of sales tax exemption for your applicable jurisdiction:
  • Qualified reseller:
    Klaviyo accepts state-issued resale certificates or multi-state resale certificates, depending on the laws of the state in which you conduct business. Please review your state’s Department of Revenue website for acceptable proof. Acceptable forms of support may include:
    • State-issued resale certificates
    • Multi-jurisdiction uniform sales and use tax exemption/resale certificate when permitted by state regulations
    • Streamlined sales tax certificate of exemption when permitted by state regulations
  • Nonprofit or government agency:
    Klaviyo accepts exemption certificates based on state and local tax rules for applicable jurisdiction. Please review your state's Department of Revenue website to confirm whether your entity is tax-exempt and what documentation is required to validate your exemption. Acceptable forms of support may include:
    • State-issued exemption certificates
    • IRS Determination Letter and/or IRS Form 1023 or 1024, based on state regulations
    • Streamlined sales tax certificate of exemption when permitted by state regulations
    • Any other documentation required to validate qualifying status based on state requirements (Articles of Incorporation and/or Bylaws, financial statements and/or Form 990, etc.)

After emailing your request for tax exemption, you can expect a response from Klaviyo within 3-5 business days notifying you of if your request has been approved or denied based on the completeness and accuracy of the information you submitted.

Refunds

Automatic billing

Klaviyo charges sales tax on any subscription, upgrade, or other purchase made unless an application for sales tax exemption is submitted and approved. If you submit your application after taxation and require a refund, please reach out to our Support Team.

They will provide updates regarding the status of your requested exemption and the expected timeline of your refund; then, they will refund the amount of sales tax previously charged. Refunds typically take up to 7 business days to process.

Manual billing

If you are a customer who is billed manually and was charged sales tax, please follow the above instructions to request an exemption, but direct the information to [e-mail] rather than to our Support Team.

You will hear back from Klaviyo within 3-5 business days regarding whether your request for exemption is approved or denied based on the information submitted. You will then receive a credit memo for the sales tax charge which will be applied to your account in the next billing cycle. Please note that refunds will not be processed for active, manually billed customers.

Additional resources

• Understand US sales tax in Klaviyo.
• Understand how Klaviyo billing works