This may be a dumb question but i would just like to get some clarity. If we exempt ABC INC on 3/15/2010 we should review that exemption 3/15/2011 as that would be annualy correct? OR do you review the exemption once a year regardless of when their initial exemption was?

I would do the review within 1 year of the effective date of the exemption. Doing it any other way could result in a period of as long as 21 months (using your 3/15/2010 example) and I doubt that this would pass muster.

I would establish a time to do all your annual reviews and review all exemptions at the same time each year so that they are not scattered willy nilly throughout the year. If you have a new exemption, an early review will not hurt you to get them on the normal annual schedule.

I agree with Randy, that's what I do here and it works great! All customers are done at the same time.

I review all of our exempt customers in February of each year. The first year, the newly exempted customers get an early review since 12 months have not elapsed.