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N834 Remark Code: Jurisdiction Exempt From Sales Tax

N834 means the payer did not pay sales tax or health-related tax charges on the claim because the jurisdiction involved is exempt from them. Any tax amount billed is adjusted off rather than paid.

Code: N834 (RARC N834)
Status: Active In use since November 1, 2020.
Code set: Remittance Advice Remark Codes (RARC)
Group codes: CO (Contractual Obligation): The tax amount billed is not paid and is a provider adjustment, not a patient balance.
Official description: Jurisdiction exempt from sales and health tax charges.
X12 Remittance Advice Remark Codes, retrieved September 25, 2026
Last verified: September 24, 2026 against the official X12 list.

What N834 means

Some claims, particularly for equipment and supplies, include a sales tax charge or a health-related tax. Whether those charges apply depends on the state and local tax jurisdiction. N834 says the payer determined the jurisdiction on this claim is exempt from sales and health tax charges, so it didn’t pay the tax amount.

It usually appears alongside CARC 235 (sales tax) or CARC 137 (regulatory surcharges and health-related taxes). The underlying item or service may be paid normally; only the tax portion is affected.

Common causes

Tax added automatically by the billing system based on the supplier’s location rather than the delivery location.
Exempt jurisdiction or program. The area, or the payer program, doesn’t impose the tax the claim billed.
Outdated tax tables in the billing system after a rate or exemption change.

What to do

Confirm the jurisdiction that governs the sale, usually the delivery address.
Check your tax configuration. If the system added tax in error, fix the rule so it stops charging tax for exempt areas.
Post the tax amount as an adjustment. Don’t transfer it to the patient.
If you believe tax does apply, gather the relevant tax rule and ask the payer to review. Talk to your tax adviser before changing how you charge tax.

How to prevent it

Base tax calculations on delivery location and payer rules, not only your business address.
Review tax tables when you expand to new service areas.
Track N834 and N659 in ERA Analyzer to spot misconfigured tax lines.

Codes that may appear with N834

CO-235 (Sales Tax): Sales tax, the adjustment category for the tax charge involved.
CO-137 (Regulatory Surcharges, Assessments, Allowances or Health Related Taxes.): Regulatory surcharges, assessments, allowances, or health-related taxes.

N659 (This item is exempt from sales tax.): A specific item was exempt from sales tax, rather than the whole jurisdiction.
N660 (Sales tax has been included in the reimbursement.): Sales tax was included in the reimbursement.

N834 FAQ

When do claims include sales tax?

Mostly on items such as durable medical equipment and supplies, where some states or localities tax the sale and some payers reimburse the tax. Many services are never taxed.

Can I bill the patient the tax instead?

Not if the jurisdiction is exempt. N834 says no tax applies there, so there's nothing to collect from anyone.

How do I know which jurisdiction the payer used?

It's usually based on where the item was delivered or the service was provided. Ask the payer if the result doesn't match your tax setup.

Important: read before using this information

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