Calling experts in Drop-shipping: I have a customer "A" who is located in the same state as my company. They are a marketplace. They sold to a customer "B" in a state in which my company has nexus and is registered. "A" does not have nexus in that state. Since we drop-shipped to "B", NetSuite, pulling from AvaTax calculated tax on A's invoice. Shipping state is an SST state, so I cannot override tax in Netsuite. What are my options?

@MaryPeace I'm curious how others handle this as well. I run into this issue (our company has nexus in the end user's ship-to state, but the reseller does not. Therefore the reseller can't/doesn't want to register for sales tax and can't provide an exemption certificate). Possible workaround: some states do not require the reseller to register there to be able to complete a sales tax exemption certificate (check the wording on the cert for the state in question); if that's the case, the reseller can provide you an exemption cert for that state and problem solved. This doesn't work for all states though. Other than that, what are people doing? Having resellers eat the cost of tax? Letting resellers short-pay you?

Thank you Chris! I've sent information from the specific state on to our customer. It looks like they may not need to be registered in that state to provide a certificate as a reseller.