Section H.1

Tax Engine Overview

Understanding NetSuite's two tax engines and choosing the right approach for your implementation.

SuiteTax vs Legacy Tax

NetSuite offers two tax calculation engines. Understanding the differences is critical for implementation planning.

SuiteTax (Recommended)
  • Modern tax engine (2019+)
  • Tax-inclusive pricing support
  • Multi-nexus per transaction
  • Real-time rate lookup
  • Better international support
  • Required for new accounts
  • Tax audit trail built-in
Legacy Tax
  • Original tax engine
  • Tax-exclusive only
  • Single nexus per subsidiary
  • Manual rate maintenance
  • Limited international
  • Only for existing accounts
  • Cannot enable after SuiteTax

Decision Matrix

Requirement SuiteTax Legacy Tax
New NetSuite account Required Not available
US multi-state sales Excellent Complex setup
International VAT/GST Built-in Limited
Tax-inclusive pricing Yes No
Third-party tax engine Avalara, Vertex, etc. Avalara only
Marketplace facilitator Supported Manual
Migration Path

Legacy Tax to SuiteTax migration is a one-way, irreversible process. NetSuite provides migration tools, but plan carefully. All tax codes, schedules, and nexus records must be recreated in SuiteTax format. Historical transactions retain Legacy Tax data.

Third-Party Tax Engines

For complex tax scenarios, integrate with specialized tax calculation services.

Provider Best For Integration
Avalara AvaTax US sales tax, high volume Native SuiteApp
Vertex Enterprise, complex scenarios Native SuiteApp
Thomson Reuters ONESOURCE Global enterprise Integration required
Sovos VAT compliance, e-invoicing Integration required

When to Use Third-Party

  • High transaction volume: 10,000+ taxable transactions/month
  • Multi-state nexus: 15+ states with frequent rate changes
  • Product taxability: Complex rules (SaaS, digital goods, clothing)
  • Exemption management: Many B2B customers with certificates
  • Audit support: Need third-party audit defense
Section H.2

SuiteTax

Comprehensive guide to NetSuite's modern tax calculation engine.

SuiteTax Architecture

SuiteTax Calculation Flow: Transaction Created ↓ ┌─────────────────────────────────────────────────────────────────┐ │ 1. NEXUS DETERMINATION │ │ Ship-from location → Nexus records │ │ Ship-to address → Tax jurisdiction │ │ Result: Which tax authorities apply │ ├─────────────────────────────────────────────────────────────────┤ │ 2. TAXABILITY CHECK │ │ Item tax type → Tax code mapping │ │ Customer exemptions → Override check │ │ Result: Taxable or exempt per jurisdiction │ ├─────────────────────────────────────────────────────────────────┤ │ 3. RATE LOOKUP │ │ Jurisdiction + Tax type → Tax schedule │ │ Effective date check │ │ Result: Tax rate(s) to apply │ ├─────────────────────────────────────────────────────────────────┤ │ 4. TAX CALCULATION │ │ Line amount × Rate = Tax amount │ │ Rounding rules applied │ │ Result: Tax amounts per line, per jurisdiction │ └─────────────────────────────────────────────────────────────────┘ ↓ Tax Lines Added to Transaction

SuiteTax Setup Steps

Step 1: Enable SuiteTax Features

Path: Setup → Company → Enable Features → Tax Required Features: ☑ SuiteTax ☑ Tax Reporting Framework (for reports) Optional Features: ☐ SuiteTax for Advanced Taxes (VAT, GST) ☐ Tax Audit Files (SAF-T, etc.)

Step 2: Configure Tax Calculation Preferences

Path: Setup → Tax → Tax Preferences Key Settings: ┌─────────────────────────────────────────────────────────────────┐ │ Tax Rounding: │ │ ○ Round per line item │ │ ● Round at transaction level (recommended) │ │ │ │ Tax Calculation On: │ │ ● Gross amount (before discounts) │ │ ○ Net amount (after discounts) │ │ │ │ Default Tax Code: (for non-taxable) │ │ [Non-Taxable] │ └─────────────────────────────────────────────────────────────────┘

Step 3: Create Nexus Records

Path: Setup → Tax → Nexus → New For each state/country where you have tax obligation: ┌─────────────────────────────────────────────────────────────────┐ │ Country: United States │ │ State: California │ │ Description: CA Sales Tax Nexus │ │ │ │ Subsidiaries: [Select applicable] │ │ │ │ Tax Agency: California State Board of Equalization │ │ Tax Registration Number: [Your CA registration] │ │ │ │ Effective From: 01/01/2024 │ │ Effective To: (leave blank if ongoing) │ └─────────────────────────────────────────────────────────────────┘

Step 4: Create Tax Types

Path: Setup → Tax → Tax Types → New Tax Types define categories of taxation: Example Tax Types: ┌─────────────────────────────────────────────────────────────────┐ │ Name: Standard Goods │ │ Description: Tangible personal property │ │ Country: United States │ │ │ │ Name: SaaS/Digital Services │ │ Description: Software as a Service │ │ Country: United States │ │ │ │ Name: Exempt Services │ │ Description: Non-taxable professional services │ │ Country: United States │ └─────────────────────────────────────────────────────────────────┘

Step 5: Create Tax Codes

Path: Setup → Tax → Tax Codes → New Tax Codes link to Tax Types and appear on transactions: ┌─────────────────────────────────────────────────────────────────┐ │ Name: TAXABLE │ │ Tax Type: Standard Goods │ │ Description: Standard taxable goods and services │ │ Available On: Sales, Purchases │ │ Country: United States │ │ │ │ Name: EXEMPT │ │ Tax Type: Exempt Services │ │ Rate: 0% │ │ Description: Non-taxable items │ │ │ │ Name: SHIPPING │ │ Tax Type: Shipping & Handling │ │ Description: Freight and delivery charges │ └─────────────────────────────────────────────────────────────────┘

Step 6: Create Tax Schedules

Path: Setup → Tax → Tax Schedules → New Tax Schedules define rates by jurisdiction: ┌─────────────────────────────────────────────────────────────────┐ │ Name: CA Sales Tax - Standard │ │ Nexus: California │ │ Tax Type: Standard Goods │ │ │ │ Rate Details: │ │ Effective Date: 01/01/2024 │ │ Rate: 7.25% (state portion) │ │ District taxes: (vary by location) │ │ │ │ Apply To: │ │ ☑ Taxable items │ │ ☐ Shipping (handled separately in CA) │ └─────────────────────────────────────────────────────────────────┘

SuiteTax on Transactions

Transaction Tax Determination

Field Source Impact
Ship To Customer default or order entry Determines tax jurisdiction (destination)
Ship From Location record Determines nexus (origin-based states)
Item Tax Code Item record default Determines taxability category
Customer Tax Exempt Customer record Overrides taxability
Nexus Override Transaction field Manual nexus selection

Tax Display on Transaction

Invoice Line Items: ┌────────────────────────────────────────────────────────────────────┐ │ Item Qty Rate Amount Tax Code Tax Amount │ ├────────────────────────────────────────────────────────────────────┤ │ Widget 10 $100 $1,000 TAXABLE $86.25 │ │ Service 1 $500 $500 EXEMPT $0.00 │ │ Shipping 1 $50 $50 SHIPPING $4.31 │ ├────────────────────────────────────────────────────────────────────┤ │ Subtotal: $1,550 │ │ Tax: $90.56 │ │ Total: $1,640.56 │ └────────────────────────────────────────────────────────────────────┘ Tax Detail (expandable): CA State Tax (7.25%): $76.13 LA County Tax (0.25%): $2.63 City of LA Tax (1.13%): $11.80 Total: $90.56
Section H.3

Legacy Tax

Reference for organizations still using the original NetSuite tax engine.

Legacy Tax Structure

Legacy Tax uses a simpler but less flexible structure than SuiteTax.

Legacy Tax Hierarchy: Subsidiary └── Tax Agency (one per nexus) └── Tax Group (combines rates) └── Tax Code (individual rates) Example: US Operations (Subsidiary) └── California FTB (Tax Agency) └── CA Sales Tax Group ├── CA State Tax (7.25%) └── CA District Tax (varies)

Key Differences from SuiteTax

Feature Legacy Tax SuiteTax
Nexus per subsidiary One Multiple
Rate source Manual entry Automatic lookup available
Tax-inclusive No Yes
Address validation Basic Enhanced
Transaction override Limited Flexible

Legacy Tax Setup

Step 1: Create Tax Agencies

Path: Setup → Accounting → Tax Agencies → New Tax Agency = Government entity you remit tax to: ┌─────────────────────────────────────────────────────────────────┐ │ Name: California Department of Tax and Fee Administration │ │ State: California │ │ Liability Account: 2200 - Sales Tax Payable │ │ Payable Account: 2200 - Sales Tax Payable │ └─────────────────────────────────────────────────────────────────┘

Step 2: Create Tax Codes

Path: Lists → Accounting → Tax Codes → New Tax Code = Individual tax rate: ┌─────────────────────────────────────────────────────────────────┐ │ Name: CA-STATE │ │ Tax Agency: California CDTFA │ │ Rate: 7.25% │ │ Description: California State Sales Tax │ │ │ │ Available On: │ │ ☑ Sales │ │ ☑ Purchases │ │ │ │ Accounts: │ │ Tax Payable: 2200 - Sales Tax Payable │ │ Tax Receivable: 1300 - Input Tax Receivable │ └─────────────────────────────────────────────────────────────────┘

Step 3: Create Tax Groups

Path: Lists → Accounting → Tax Groups → New Tax Group = Combination of tax codes: ┌─────────────────────────────────────────────────────────────────┐ │ Name: CA-COMBINED │ │ Description: California Combined Rate │ │ │ │ Tax Codes Included: │ │ ☑ CA-STATE (7.25%) │ │ ☑ CA-COUNTY (0.25%) │ │ ☑ CA-CITY (varies) │ │ ☑ CA-DISTRICT (varies) │ │ │ │ Combined Rate: (calculated automatically) │ └─────────────────────────────────────────────────────────────────┘
Rate Maintenance Challenge

Legacy Tax requires manual rate updates. US sales tax rates change frequently (2,000+ changes annually). Consider third-party tax services (Avalara) for automatic rate updates, or plan for regular manual maintenance.

Section H.4

Nexus Management

Understanding and configuring sales tax nexus in NetSuite.

Understanding Nexus

Nexus is the connection between a business and a taxing jurisdiction that creates a tax collection obligation.

Types of Nexus

Nexus Type Created By Example
Physical Presence Office, warehouse, employees Warehouse in Texas = TX nexus
Economic Nexus Sales volume/count thresholds $100K sales to CA = CA nexus
Click-Through Nexus Affiliate referrals NY affiliate sales = NY nexus
Marketplace Nexus Third-party platform sales Amazon handles (marketplace facilitator)

Economic Nexus Thresholds (Common)

Most US States (post-Wayfair): $100,000 in sales OR 200 transactions Exceptions: California: $500,000 (no transaction threshold) Texas: $500,000 (no transaction threshold) New York: $500,000 AND 100 transactions Note: Thresholds measured over prior 12 months Check current state requirements regularly

Nexus Tracking in NetSuite

Economic Nexus Monitoring

Saved Search: Economic Nexus Threshold Tracking Type: Transaction (Sales) Criteria: - Type: Invoice, Cash Sale - Date: within last 12 months Results by State: Group By: Shipping State Summary: - COUNT(Document Number) as Transaction Count - SUM(Amount) as Total Sales Formula (Alert): CASE WHEN {amount_sum} > 100000 OR {count} > 200 THEN 'NEXUS THRESHOLD MET' ELSE 'Below Threshold' END

Nexus Record Configuration

Path: Setup → Tax → Nexus For each nexus jurisdiction: ┌─────────────────────────────────────────────────────────────────┐ │ Nexus Record: California │ ├─────────────────────────────────────────────────────────────────┤ │ Country: United States │ │ State: CA │ │ │ │ Subsidiaries: │ │ ☑ US Operations │ │ ☐ Canada Operations │ │ │ │ Tax Registration: │ │ Registration #: 12-345678 │ │ Effective Date: 01/01/2020 │ │ │ │ Tax Agency: California CDTFA │ │ │ │ Nexus Type: ☑ Physical ☑ Economic │ └─────────────────────────────────────────────────────────────────┘

Origin vs Destination Based Tax

State Type Tax Based On States
Origin-Based Seller's location AZ, CA, IL, MS, MO, NM, OH, PA, TN, TX, UT, VA
Destination-Based Buyer's location Most other states (majority)
Mixed/Modified Varies by transaction type CA (intrastate origin, interstate destination)
Location Configuration Critical

For origin-based states, ensure your NetSuite Location records have accurate addresses. The Ship From location determines which tax rates apply for in-state sales.

Section H.5

Tax Codes & Schedules

Configuring tax codes and schedules for accurate tax calculation.

Tax Code Strategy

Design tax codes around taxability categories, not individual rates.

Recommended Tax Code Structure

Tax Codes (by taxability): TAXABLE - Standard taxable goods TAXABLE-REDUCED - Reduced rate items (groceries in some states) EXEMPT - Non-taxable items SHIPPING - Freight & delivery LABOR - Installation/service labor SAAS - Software as a Service DIGITAL - Digital products/downloads CLOTHING - Apparel (special rules in some states) MEDICAL - Medical equipment/supplies RESALE - Resale/wholesale (B2B exempt) DO NOT create: CA-TAXABLE, NY-TAXABLE, TX-TAXABLE... (rates handled by schedules, not codes)

Tax Code on Items

Item Record → Accounting Tab: ┌─────────────────────────────────────────────────────────────────┐ │ Item: Widget Pro │ │ │ │ Tax Schedule: (SuiteTax) │ │ [Standard Goods Schedule] │ │ │ │ OR │ │ │ │ Tax Code: (Legacy) │ │ Sales: [TAXABLE] │ │ Purchase: [TAXABLE] │ └─────────────────────────────────────────────────────────────────┘ Best Practice: Set default tax code on item, override on transaction only for exceptions

Tax Schedules (SuiteTax)

Tax Schedule Components

Component Purpose Example
Nexus Which jurisdiction California, Texas, UK
Tax Type Taxability category Standard Goods, SaaS
Rate Tax percentage 7.25%, 0%
Effective Date When rate applies 01/01/2024
End Date When rate expires (blank for current)

Rate Change Management

When tax rates change: Option 1: Add new effective-dated rate ┌─────────────────────────────────────────────────────────────────┐ │ Tax Schedule: CA State Sales Tax │ │ │ │ Rate History: │ │ Effective End Date Rate │ │ 01/01/2020 06/30/2024 7.25% │ │ 07/01/2024 (current) 7.50% ← New rate │ └─────────────────────────────────────────────────────────────────┘ Historical transactions retain original rate New transactions use current effective rate

Product Taxability Rules

Common Taxability Variations by State

Product Type Generally Taxable Notable Exceptions
Tangible Goods Yes (all states) Some exemptions (groceries, medicine)
SaaS Varies widely TX yes, CA no, NY yes, FL no
Digital Downloads Varies Many states taxable, some exempt
Clothing Most states yes PA, NJ, NY (under $110) exempt
Food/Groceries Varies Many states exempt, some reduced rate
Shipping Varies Taxable if product taxable (most states)
Installation Labor Varies Often exempt if separately stated
SaaS Taxability is Complex

SaaS taxation is one of the most complex areas. Rules vary not just by state, but by whether the software is "canned" vs "custom", delivered via download vs access, and whether any tangible media is involved. Consider consulting a tax professional or using a third-party tax engine for SaaS products.

Section H.6

Tax Exemptions

Managing customer tax exemptions and exemption certificates.

Exemption Types

Exemption Type Certificate Required Common Uses
Resale Resale Certificate Wholesale, distributors, retailers
Manufacturing Direct Pay / Exemption Cert Raw materials for manufacturing
Government Government ID / Letter Federal, state, local agencies
Nonprofit 501(c)(3) Letter + State Cert Charitable organizations
Agricultural Ag Exemption Certificate Farm supplies, equipment
Direct Pay Direct Pay Permit Large buyers who self-remit

Customer Exemption Setup

Method 1: Customer Record Flag

Path: Lists → Relationships → Customers → Edit Customer Record → Financial Tab: ┌─────────────────────────────────────────────────────────────────┐ │ Tax Settings: │ │ │ │ Taxable: ☐ (unchecked = exempt) │ │ │ │ Tax Exemption: │ │ Exempt Reason: Resale │ │ Exempt Certificate #: RS-123456-CA │ │ Exempt Expiration: 12/31/2025 │ │ │ │ Exempt Jurisdictions: (SuiteTax) │ │ ☑ California │ │ ☑ Nevada │ │ ☐ Arizona (not exempt here) │ └─────────────────────────────────────────────────────────────────┘

Method 2: Tax Exemption Records (SuiteTax)

Path: Lists → Relationships → Tax Exemptions → New More granular control with dedicated records: ┌─────────────────────────────────────────────────────────────────┐ │ Customer: ABC Wholesale │ │ Nexus: California │ │ Exemption Type: Resale │ │ Certificate Number: RS-123456-CA │ │ │ │ Validity: │ │ Start Date: 01/01/2024 │ │ End Date: 12/31/2028 │ │ │ │ Product Categories: (optional - limit exemption scope) │ │ ☑ All products │ │ OR │ │ ☑ Tangible goods only │ │ ☐ Services (not included in their resale cert) │ └─────────────────────────────────────────────────────────────────┘

Exemption Certificate Management

Certificate Tracking Checklist

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Collect certificate before shipping exempt orders
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Verify certificate is valid for customer's state
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Check certificate hasn't expired
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Store certificate copy (attach to customer record)
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Set expiration reminder in NetSuite
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Re-verify certificates annually or at renewal

Expiration Monitoring

Saved Search: Expiring Exemption Certificates Type: Customer Criteria: - Tax Exempt = Yes - Exempt Expiration Date: within next 60 days Results: Customer | Exempt # | Expiration | Days Until Expiry Alert: Email customer success team for renewal follow-up
Audit Risk: Invalid Certificates

If audited, you must produce valid exemption certificates for all exempt sales. Missing or expired certificates can result in back-tax liability plus penalties. Consider using certificate management services like Avalara CertCapture or TaxJar AutoFile.

Section H.7

VAT & GST

International value-added tax and goods & services tax configuration.

VAT Fundamentals

VAT vs US Sales Tax

Characteristic VAT/GST US Sales Tax
Collected by Every step of supply chain Final sale to consumer
Recovery Input VAT offset against output No recovery (except resale)
Pricing Usually tax-inclusive (B2C) Tax-exclusive
Rates National (one rate per country) Local (thousands of jurisdictions)
Registration VAT ID required State-by-state registration

Common VAT Rates

Standard VAT Rates (2024): European Union: Germany: 19% (reduced 7%) France: 20% (reduced 5.5%, 10%) UK: 20% (reduced 5%, 0%) Netherlands: 21% (reduced 9%) Spain: 21% (reduced 10%, 4%) Italy: 22% (reduced 10%, 5%, 4%) Other: Australia GST: 10% Canada GST: 5% (+ provincial PST/HST varies) Japan: 10% India GST: 5%, 12%, 18%, 28% (by product)

VAT Configuration in NetSuite

Enable VAT Features

Path: Setup → Company → Enable Features Required: ☑ SuiteTax ☑ SuiteTax for Advanced Taxes Tax Types to Create: - Standard Rate - Reduced Rate - Zero Rate - Exempt - Reverse Charge - Out of Scope

VAT Registration Setup

Subsidiary Record → Tax Registration Tab: ┌─────────────────────────────────────────────────────────────────┐ │ Tax Registrations: │ │ │ │ Country VAT Number Effective │ │ Germany DE123456789 01/01/2020 │ │ France FR12345678901 01/01/2021 │ │ UK GB123456789 01/01/2019 │ │ │ │ Note: One registration per EU country where you sell/store │ └─────────────────────────────────────────────────────────────────┘

Intra-EU Transactions

B2B Sales within EU: Scenario: German company sells to French company If French buyer has valid VAT ID: - Sale is zero-rated (0% VAT) - French buyer self-assesses VAT (reverse charge) - Report on EC Sales List If French buyer has NO VAT ID (or invalid): - Charge German VAT (19%) - Treat as B2C sale NetSuite Handling: - Enter customer VAT ID on customer record - System validates format - Auto-applies correct tax treatment

Tax-Inclusive Pricing

Configuration for B2C Markets

Path: Setup → Tax → Tax Preferences Tax Inclusive Setting: ┌─────────────────────────────────────────────────────────────────┐ │ ☑ Enable Tax-Inclusive Pricing │ │ │ │ Default Behavior: │ │ Item prices INCLUDE tax │ │ System backs out tax amount │ │ │ │ Example: │ │ Item price: €119.00 (tax-inclusive) │ │ VAT rate: 19% │ │ Net amount: €100.00 │ │ VAT amount: €19.00 │ │ Total: €119.00 │ └─────────────────────────────────────────────────────────────────┘ Per-Item Override: Item record → Pricing → Tax-Inclusive checkbox
Section H.8

Withholding Tax

Configuring withholding tax for vendor payments and international transactions.

Withholding Tax Overview

Withholding tax is deducted at source when paying vendors, then remitted to tax authorities.

Common Withholding Scenarios

Scenario Typical Rate Form/Report
US 1099-MISC 24% (backup withholding) 1099-MISC/NEC
US 1042-S (Foreign) 30% (or treaty rate) 1042-S
India TDS 2-10% (varies by type) TDS Returns
Brazil IRF 1.5-15% (varies) DIRF
Australia PAYG 47% (no TFN) PAYG Summary

Withholding Tax Setup

Step 1: Enable Withholding Tax

Path: Setup → Company → Enable Features → Tax ☑ Withholding Tax

Step 2: Create Withholding Tax Codes

Path: Setup → Tax → Withholding Tax Codes → New ┌─────────────────────────────────────────────────────────────────┐ │ Name: US-BACKUP-24 │ │ Rate: 24% │ │ Description: US Backup Withholding │ │ │ │ Accounts: │ │ Liability: 2250 - Withholding Tax Payable │ │ Expense: (optional - if grossing up) │ │ │ │ Applies To: │ │ ☑ Vendor payments │ │ ☐ Customer receipts │ └─────────────────────────────────────────────────────────────────┘

Step 3: Configure Vendor Records

Vendor Record → Financial Tab: ┌─────────────────────────────────────────────────────────────────┐ │ Withholding Tax: │ │ Subject to Withholding: ☑ Yes │ │ Withholding Tax Code: US-BACKUP-24 │ │ Tax ID Number: (W-9 info) │ │ │ │ 1099 Settings: │ │ 1099 Eligible: ☑ Yes │ │ 1099 Type: NEC (Non-Employee Compensation) │ │ Tax ID: XX-XXXXXXX │ └─────────────────────────────────────────────────────────────────┘

Payment with Withholding

Bill Payment Calculation: Vendor Bill: $10,000 Withholding Rate: 24% Withholding Amount: $2,400 Payment to Vendor: $7,600 Liability to Tax Authority: $2,400 GL Entry: Dr: Accounts Payable $10,000 Cr: Cash $7,600 Cr: Withholding Payable $2,400
Section H.9

Tax Reporting

Generating tax reports, returns, and compliance filings.

Standard Tax Reports

US Sales Tax Reports

Path: Reports → Tax Available Reports: ┌─────────────────────────────────────────────────────────────────┐ │ Tax Liability Report │ │ - Tax collected by jurisdiction │ │ - Period selection │ │ - Use for filing state returns │ │ │ │ Tax Detail Report │ │ - Transaction-level detail │ │ - For audit support │ │ │ │ Taxable Sales by Customer │ │ - Customer-level summary │ │ - Identify exempt vs taxable │ │ │ │ Tax Exemption Report │ │ - All exempt transactions │ │ - Certificate validation │ └─────────────────────────────────────────────────────────────────┘

VAT Reports

Path: Reports → Tax → International Tax Reports VAT Reports: ┌─────────────────────────────────────────────────────────────────┐ │ VAT/GST Report │ │ - Output VAT (sales) │ │ - Input VAT (purchases) │ │ - Net VAT payable/receivable │ │ │ │ EC Sales List (EU) │ │ - Intra-community supplies │ │ - Customer VAT IDs │ │ - Required for EU reporting │ │ │ │ Intrastat Report │ │ - Physical goods movement │ │ - Commodity codes │ │ - Required above thresholds │ └─────────────────────────────────────────────────────────────────┘

1099 Reporting (US)

1099 Configuration

Path: Setup → Accounting → Accounting Preferences 1099 Settings: ☑ Track 1099 on Accounts Payable transactions 1099 Filing Subsidiary: [Select] Reporting Threshold: $600 Vendor 1099 Categories: - 1099-NEC: Non-Employee Compensation - 1099-MISC: Rents, royalties, other - 1099-INT: Interest - 1099-DIV: Dividends

1099 Process

Annual 1099 Process: 1. VERIFY VENDOR DATA (November) - Run 1099 Vendor Report - Verify all 1099 vendors have Tax ID - Request W-9 from vendors missing info 2. REVIEW TRANSACTIONS (December) - Run 1099 Transaction Detail - Verify correct 1099 category on bills - Identify vendors over $600 threshold 3. GENERATE 1099s (January) Path: Tax → 1099 Forms → Generate 1099 Forms - Select tax year - Review generated forms - Print/mail or e-file 4. FILE WITH IRS - Due: January 31 (recipient copies) - Due: March 31 (IRS e-file)

Tax Filing Automation

Third-Party Filing Services

Service Integration Features
Avalara Returns Native SuiteApp Auto-file US sales tax returns
TaxJar AutoFile Integration US sales tax filing
Sovos Integration Global VAT compliance
Thomson Reuters Integration Enterprise tax filing
Filing Calendar

Create a saved search or calendar to track filing due dates by state. Filing frequencies vary: monthly (large volume), quarterly (mid-size), annual (small/new). Missing deadlines results in penalties and interest.

Section H.10

Troubleshooting

Common tax configuration issues and how to resolve them.

Common Tax Issues

Issue: No Tax Calculating on Transaction

Check Resolution
Customer marked tax exempt? Review customer record → Financial → Taxable checkbox
Ship-to address in nexus state? Verify nexus record exists for destination state
Item has tax code/schedule? Check item record → Accounting → Tax Schedule
Tax schedule has rate for jurisdiction? Verify tax schedule covers the ship-to jurisdiction
Ship-from location configured? Location record needs complete address

Issue: Wrong Tax Rate Applied

Check Resolution
Address ZIP code correct? US district taxes based on 9-digit ZIP
Rate effective date current? Check tax schedule for outdated rates
Correct tax type on item? Different rates may apply by product type
Origin vs destination confusion? Some states are origin-based

Issue: Tax Not Remitting to Correct Account

Check Tax Code/Agency Account Settings: SuiteTax: Path: Setup → Tax → Tax Schedules → Edit Verify: Liability Account field Legacy Tax: Path: Lists → Accounting → Tax Codes → Edit Verify: Tax Payable Account field Common Fix: Multiple tax liability accounts needed for different jurisdictions/agencies

Tax Audit Preparation

Audit Readiness Checklist

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All exemption certificates on file and valid
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Tax returns match NetSuite reports
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Nexus documentation (when/why established)
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Product taxability research documented
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Rate change history available
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Voided/adjusted transactions documented
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Use tax accruals for untaxed purchases

Audit Support Reports

Key Reports to Run: 1. Tax Detail Report (by period) - Every taxable transaction - Tax code and rate applied - Export to Excel for auditor 2. Exemption Report - All exempt transactions - Cross-reference to certificates 3. Tax Reconciliation - GL tax liability balance - vs Tax Report totals - Identify discrepancies 4. Rate Change Log - When rates changed - What transactions affected

Tax Implementation Checklist

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Determine tax engine: SuiteTax vs Legacy vs Third-Party
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Document all nexus obligations (physical + economic)
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Create nexus records for each jurisdiction
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Define tax types based on product taxability
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Create tax codes (by taxability, not by state)
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Configure tax schedules with current rates
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Set default tax codes on item records
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Configure customer exemptions with certificates
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Verify location addresses for ship-from accuracy
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Test tax calculation with sample transactions
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Configure tax reports and filing calendar
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Document rate update process (manual or automated)