Sales tax is applied to orders according to the customer’s country and state or province, using our constantly updated tax logic. It's the same logic for invoices issued via our Invoicing tool and orders made via the Paddle Checkout. 

If your customer has a valid sales tax ID, this can be entered by you when creating the invoice when using our Invoicing tool or by the customer when using our Paddle Checkout. The amount of tax is then revised accordingly and the customer is shown the final amount for the transaction.

The below refers to Paddle Billing.

If your customer has a sales tax exemption certificate, Paddle can mark the customer as tax exempt and the tax amount will be revised accordingly. To do so, the customer will have to send the tax exemption documentation to our buyer support team via assist@paddle.com. Our buyer support team will then review the documentation and mark the customer the tax exempt accordingly if the documentation is valid. 

The below refers to Paddle Classic. 

If your customer has a sales tax exemption certificate, Paddle can issue a tax refund only after the order has been paid.
To do so, the customer will have to send the tax exemption documentation to our buyer support team via assist@paddle.com. Our buyer support team will then review the documentation and issue the tax refund accordingly if the documentation is valid.

In Paddle Classic, marking a customer exempt for sales tax is only possible after the order has been paid.