> ## Documentation Index
> Fetch the complete documentation index at: https://docs.numeral.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Exemptions Behavior

There are many sales for which you shouldn't charge any sales tax. In any `calculation` Numeral will return the appropriate amount - even if it's zero. You won't have to build a different handler for exempt sales, but we do include information in the `calculation` responses to clarify why we refrain from collecting tax on some orders. Let's look at some examples of these messages and tax-exempt situations.

#### Product exemption

If your product is exempt in a certain state or jurisdiction, we'll return the accurate sales tax rate of 0%

Food sales are exempt in Michigan. A `calculation` with the following line items in Michigan will get the following response.

<Accordion title="Example line items">
  ```json theme={null}
      "line_items": [
        {
          "product_category": "GENERAL_MERCHANDISE",
          "amount": 1000,
          "quantity": 1
        },
        {
          "product_category": "FOOD_GENERAL",
          "amount": 1000,
          "quantity": 1
        }
      ]
  ```
</Accordion>

<Accordion title="Sample response">
  ```json theme={null}
  {
    "customer_currency_code": "USD",
    "expires_at": 1737613667,
    "id": "calc_173752726701471b4bfed-454c-4454-8b55-84bcb6d56eb8",
    "line_items": [
      //This first line item is the taxable general merchandise
      {
        "amount_excluding_tax": 1000,
        "amount_including_tax": 1060,
        "product": {
          "product_tax_code": "GENERAL_MERCHANDISE",
          "reference_line_item_id": "",
          "reference_product_id": "",
          "reference_product_name": ""
        },
        "quantity": 1,
        "tax_amount": 60,
        "tax_jurisdictions": [
          {
            "fee_amount": 0,
            "jurisdiction_name": "MICHIGAN",
            "note": "",
            "rate_type": "STATE SALES TAX",
            "tax_rate": 0.06 //Taxable sale has a standard rate
          }
        ]
      },
      //This line item is for the exempt food sale
      {
        "amount_excluding_tax": 1000,
        "amount_including_tax": 1000,
        "product": {
          "product_tax_code": "FOOD_GENERAL",
          "reference_line_item_id": "",
          "reference_product_id": "",
          "reference_product_name": ""
        },
        "quantity": 1,
        "tax_amount": 0,
        "tax_jurisdictions": [
          {
            "fee_amount": 0,
            "jurisdiction_name": "MICHIGAN",
            "note": "",
            "rate_type": "STATE SALES TAX",
            "tax_rate": 0 //Exempt sale means 0% rate
          }
        ]
      }
    ],
    "metadata": {
      "example_key": "example_value"
    },
    "object": "tax.calculation",
    "tax_included_in_amount": false,
    "testmode": true,
    "total_amount_excluding_tax": 2000,
    "total_amount_including_tax": 2060,
    //total_tax_amount will always display how much tax to charge
    "total_tax_amount": 60
  }
  ```
</Accordion>

#### No nexus

When you send a `calculation` in a jurisdiction in which you don't have nexus, Numeral's response will indicates not to collect any tax. We'll include a `note` in the tax jurisdiction information indicating you don't have nexus.

<Accordion title="No nexus response example">
  ```json theme={null}
  {
    "customer_currency_code": "USD",
    "expires_at": 1737614217,
    "id": "calc_173752781756346aad91d-c61d-4ee2-a0af-53945dc7abdb",
    "line_items": [
      {
        "amount_excluding_tax": 1000,
        "amount_including_tax": 1000,
        "product": {
          "product_tax_code": "GENERAL_MERCHANDISE",
          "reference_line_item_id": "",
          "reference_product_id": "",
          "reference_product_name": ""
        },
        "quantity": 1,
        "tax_amount": 0,
        "tax_jurisdictions": [
          {
            "fee_amount": 0,
            "jurisdiction_name": "State Tax",
            "note": "no_collection_no_state_nexus",
            "rate_type": "Sales Tax",
            "tax_rate": 0
          }
        ]
      }
    ],
    "object": "tax.calculation",
    "tax_included_in_amount": false,
    "testmode": false,
    "total_amount_excluding_tax": 1000,
    "total_amount_including_tax": 1000,
    "total_tax_amount": 0
  }
  ```
</Accordion>

#### Exempt customer

When you create a [customer](/objects/customers) and pass the `customer.id` into a `calculation`, Numeral will check to see if that customer has been designated as exempt. If they have, we'll include that information in the tax jurisdiction's `note`.

<Accordion title="Exempt customer response example">
  ```json theme={null}
  {
    "customer_currency_code": "USD",
    "expires_at": 1737614833,
    "id": "calc_173752843360152feec1a-e703-476e-a592-ca03e7078b50",
    "line_items": [
      {
        "amount_excluding_tax": 1000,
        "amount_including_tax": 1000,
        "product": {
          "product_tax_code": "GENERAL_MERCHANDISE",
          "reference_line_item_id": "",
          "reference_product_id": "",
          "reference_product_name": ""
        },
        "quantity": 1,
        "tax_amount": 0,
        "tax_jurisdictions": [
          {
            "fee_amount": 0,
            "jurisdiction_name": "State Tax",
            "note": "no_collection_exempt_customer",
            "rate_type": "Sales Tax",
            "tax_rate": 0
          }
        ]
      }
    ],
    "object": "tax.calculation",
    "tax_included_in_amount": false,
    "testmode": false,
    "total_amount_excluding_tax": 1000,
    "total_amount_including_tax": 1000,
    "total_tax_amount": 0
  }
  ```
</Accordion>