Once an order is placed, the tax re-calculation process (specific to Avalara) is based on order.TaxExemptionType and order.TaxExemptionReference. It does not look at the order user's tax exemption status.

However there is no UI to change these values on the admin view-order page. There is no way to change the order's taxable status once the order is placed.

For a customer who was initially charged sales tax but wishes to be tax-exempt, we'll refund those taxes collected after they submit the appropriate tax exemption paperwork. We can remove the tax line items from the Items tab, but any click of the Recalculate button is going to add them right back in. In a multi-employee environment this is all but guaranteed to create problems.

And worse, Avalara still shows the order as taxable. This means the admin is now going to pay real cash out-of-pocket to a taxing authority that was never collected from the shopper.

We need the ability to set/change the order tax exemption flag and value after the order is placed. Preferably on the Items tab right near the Recalculate button.

FYI there is more to sales tax than simply a yes/no taxable when dealing with Avalara.

The internet sales tax act in 2018 works based on the nexus of ship-to province. So a customer might be tax exempt in one state, but not tax exempt in a different state. We had to build an entire child collection to the Users object for UserTaxExemption. This was the only way to support this scenario because state will have a different exemption reference value.

Avalara also requires to know every tax exempt customer and their exempt start date, expire date and exemption number. This is separate from transactions. We had to build a completely separate export to permit importing exempt customers so we don't have to hand-enter them every month into Avalara. This is part of their requirement for all SST-registered states/provinces.

Finally, a transaction export routine had to be built to accommodate catching up the avalara transaction list if you start collecting tax after Jan 1. All of those new 2018 internet tax laws are based on nexus dollar amounts for orders shipped in the past 12 months to each state. So if you want avalara to be accurate for the current year to know when you should start charging sales tax because you reached a particular state nexus, you have to import your order history as transactions in avalara.