It’s one thing for online merchants to manage sale tax chores, but a special headache for B2B sellers is processing tax exemptions. Uline found a better way—and just in time for the post-Wayfair world.

As a family-owned distribution business, Uline plays up how it takes extra steps to please the customers who buy its packing, shipping, janitorial and other business and industrial supplies. “When a customer gets used to that, why would you want to leave?” CEO Dick Uihlein, who co-founded Uline with his wife, Liz, the company’s president, says in a company video on “We treat you well.”

It was imperative for us to come up with a solution to help customers submit their tax-exemption certificates right the first time.
Stephanie Barr, tax manager

Pleasant Prairie, Wisconsin-based Uline, which does the majority of its sales through its ecommerce site,, extends that personal touch into the business of processing sales tax, ensuring customers are treated well—especially if the customer’s purchase transaction is tax-exempt.

Uline’s attention to customer details extends into the complexities of managing what may not be everyone’s favorite chore—sorting through all the sales tax rules for its more than 36,000 different products across about two dozen categories. In addition to ensuring customer invoices have accurate sales tax figures applied to their purchase transactions and invoices, Uline has integrated a specialized tool from Vertex Inc.—the “Exemption Certificate Wizard,” or ECW—into their tax exemption process to help ensure any tax exemptions are correctly applied.

Helping to deal with the Wayfair rush

Handling those certificates—more than 13,000 per month—is easier said than done.


Dan Hood, tax director, Uline


“The difficulty we have is that a customer may think an item is categorized as packaging supplies, but we may have categorized it as office supplies,” says Dan Hood, tax director at Uline. “There can be confusion between the buyer and what we have in our inventory.”

The matter became more urgent for Uline last year when the U.S. Supreme Court’s “Wayfair” ruling opened the door for states to enforce sales tax collection by online sellers regardless of whether they had an in-state physical presence. Before Wayfair, “we were in 20 states and received about 8,000 exemption certificates a month,” says Stephanie Barr, a tax manager who supervises Uline’s team of tax analysts. “After Wayfair, we had between 13,000 and 14,000.”

Barr adds that Uline would have needed the wizard tool even without Wayfair, but that the court case made it even more crucial.

Exempt or not exempt?

A Uline customer’s exemption from sales tax can depend on various things, such as whether they’re purchasing items for their own use, which is typically not exempt, or for resale, which usually is exempt because the tax is passed onto the end-customer. Uline’s customer base ranges widely among small, mid-size and large retailers, corporate accounts and nonprofit organizations. The privately held company doesn’t release revenue figures but says it manages a large volume of orders and routinely generates annual growth rates in double digits.


Of the more than 13,000 exemption certificates customers submit each month, more than one-fifth are filled out incorrectly and, therefore, are unacceptable, Hood notes. That means Uline’s team of about a dozen people who process the certificates must work with customers to correct them. “We’ve always received a lot of certificates and had a hard time processing them,” he says. “We review certificates and update a customer’s account if they’re exempt for all products or only for some things. We have to make corrections to get good certificates from customers.”

Audits of tax records by a state department of revenue or taxation exacerbate the challenge of handling the exemption certificates. A typical audit covers records for a 3- to 4-year period. Auditors may start out reviewing a sample of orders, and if they find an error they’ll they may extrapolate their findings for that entire period.

Better prep for audits

“It was imperative for us to come up with a solution to help customers submit their certificates right the first time,” says Barr.


Stephanie Barr, tax manager, Uline


A few years ago, Uline’s tax department began thinking of how it could help customers better prepare their exemption certificates. At the same time, its tax management software provider, Vertex, was investigating ways to help their customers address the same problems. The two organizations decided to collaborate, combining Uline’s expertise in exemption certificates and Vertex’s expertise in tax software development, to co-develop a cloud-software-based tool it calls the ECW.

Uline launched the wizard in October 2019, making it available to its customers from its website. The wizard, which integrates with the Vertex O Series tax management software Uline also uses, is constantly updated with information on sales tax regulations from state and local jurisdictions nationwide. The ECW is an interactive tool that prompts users with questions—like a “TurboTax for exemption certificates,” Hood says—that guides them through correctly filling out an exemption certificate based on the tax rules in each state in which a customer operates. The ECW also validates information when users enter it and captures an electronic signature.

Examples of unacceptable certificates prepared manually include those with incorrect input of information where the claimed exemption doesn’t make sense for the customer, or where the name on the certificate doesn’t exactly match the name on the customer’s account.

The use of the automated ECW application has improved the accuracy of exemption certificates and Uline expects further improvement as more users adopt the tool. The percentage of incorrect certificates customers now submit manually is about 20%, but Uline expects that to drop as its tax analysts encourage more customers to use the ECW, Hood says.


For Uline, the ECW tool has increased operational efficiency and cost savings, while also improving user experience, he adds.

(This news article is part of a longer special report on B2B payments technologies and strategies, “Opening Ecommerce Doors with New Ways to Pay.”)

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