Entity/Use Codes identify the goods and services can be exempt from sales tax.

Certain goods and services can be exempt from sales tax in certain states based on who is buying them or how the purchased item is going to be used. Sovos identifies these exemptions with Entity/Use Codes. To make sure exemptions are applied when Global Tax Determination calculates the tax rate, map the Entity/Use Codes in your ERP system to the Sovos Entity/Use Codes.

You can read more about exemptions and exemption certificates in this article.