diff --git a/client/src/components/bill-form/bill-form.component.jsx b/client/src/components/bill-form/bill-form.component.jsx
index 44b8cd815..579d11b7b 100644
--- a/client/src/components/bill-form/bill-form.component.jsx
+++ b/client/src/components/bill-form/bill-form.component.jsx
@@ -79,6 +79,18 @@ export function BillFormComponent({
       });
   };
 
+  const handleFederalTaxExemptSwitchToggle = (checked) => {
+    if (checked) {
+      const values = form.getFieldsValue("billlines");
+      if (values && values.billlines && values.billlines.length > 0) {
+        values.billlines.forEach((b) => {
+          b.applicable_taxes.federal = false;
+        });
+      }
+      form.setFieldsValue({ billlines: values.billlines });
+    }
+  };
+
   useEffect(() => {
     if (job) form.validateFields(["is_credit_memo"]);
   }, [job, form]);
@@ -387,7 +399,16 @@ export function BillFormComponent({
         >
           <CurrencyInput min={0} />
         </Form.Item>
-        <Form.Item shouldUpdate span={15}>
+        {bodyshop.pbs_serialnumber || bodyshop.cdk_dealerid ? (
+          <Form.Item
+            span={2}
+            label={t("bills.labels.federal_tax_exempt")}
+            name="federal_tax_exempt"
+          >
+            <Switch onChange={handleFederalTaxExemptSwitchToggle} />
+          </Form.Item>
+        ) : null}
+        <Form.Item shouldUpdate span={13}>
           {() => {
             const values = form.getFieldsValue([
               "billlines",
@@ -405,7 +426,7 @@ export function BillFormComponent({
               totals = CalculateBillTotal(values);
             if (!!totals)
               return (
-                <div>
+                <div align="right">
                   <Space wrap>
                     <Statistic
                       title={t("bills.labels.subtotal")}
diff --git a/client/src/components/bill-form/bill-form.lines.component.jsx b/client/src/components/bill-form/bill-form.lines.component.jsx
index 7ce5e723e..d88a30f70 100644
--- a/client/src/components/bill-form/bill-form.lines.component.jsx
+++ b/client/src/components/bill-form/bill-form.lines.component.jsx
@@ -1,14 +1,15 @@
 import { DeleteFilled, DollarCircleFilled } from "@ant-design/icons";
 import { useTreatments } from "@splitsoftware/splitio-react";
 import {
-  Button, Form,
+  Button,
+  Form,
   Input,
   InputNumber,
   Select,
   Space,
   Switch,
   Table,
-  Tooltip
+  Tooltip,
 } from "antd";
 import React from "react";
 import { useTranslation } from "react-i18next";
@@ -466,7 +467,8 @@ export function BillEnterModalLinesComponent({
           return {
             key: `${field.index}fedtax`,
             valuePropName: "checked",
-            initialValue: true,
+            initialValue:
+              form.getFieldValue("federal_tax_exempt") === true ? false : true,
             name: [field.name, "applicable_taxes", "federal"],
           };
         },
diff --git a/client/src/translations/en_us/common.json b/client/src/translations/en_us/common.json
index 29c0a382e..884bc30ce 100644
--- a/client/src/translations/en_us/common.json
+++ b/client/src/translations/en_us/common.json
@@ -203,6 +203,7 @@
 				"entered_total": "Total of Entered Lines",
 				"enteringcreditmemo": "You are entering a credit memo. Please ensure you are also entering positive values.",
 				"federal_tax": "Federal Tax",
+				"federal_tax_exempt": "Federal Tax Exempt?",
 				"generatepartslabel": "Generate Parts Labels after Saving?",
 				"iouexists": "An IOU exists that is associated to this RO.",
 				"local_tax": "Local Tax",
diff --git a/client/src/translations/es/common.json b/client/src/translations/es/common.json
index d3d60dabf..8afe8075e 100644
--- a/client/src/translations/es/common.json
+++ b/client/src/translations/es/common.json
@@ -203,6 +203,7 @@
 				"entered_total": "",
 				"enteringcreditmemo": "",
 				"federal_tax": "",
+				"federal_tax_exempt": "",
 				"generatepartslabel": "",
 				"iouexists": "",
 				"local_tax": "",
diff --git a/client/src/translations/fr/common.json b/client/src/translations/fr/common.json
index 1a01bf1dc..36a5fa713 100644
--- a/client/src/translations/fr/common.json
+++ b/client/src/translations/fr/common.json
@@ -203,6 +203,7 @@
 				"entered_total": "",
 				"enteringcreditmemo": "",
 				"federal_tax": "",
+				"federal_tax_exempt": "",
 				"generatepartslabel": "",
 				"iouexists": "",
 				"local_tax": "",