AvaTax calculates consumer use tax on purchase invoices or purchase transactions. Some accounting software requires you to enable consumer use tax calculation in their configuration, but you don't have to do so in AvaTax. If you need a refresher, check out our short guide to consumer use tax , or watch our video describing the difference between sales tax, seller's use tax, and consumer use tax.
Verify vendor-calculated consumer use tax on a payable transaction entry
When you enable consumer use tax calculation, AvaTax calculates consumer use tax for transactions and the difference between the amount calculated by AvaTax & the vendor-paid tax displays. On approval, the consumer use tax calculated by AvaTax is posted to NetSuite in the accrual field.
To calculate consumer use tax in real-time:
In AvaTax for NetSuite, go to Transactions > Payables > Enter Bills, and enter the details of a bill.
- Add the item you selected in Item for Tax Paid to Vendor. The item amount is treated as the vendor-paid sales tax and used to compare to the tax calculated by AvaTax.
- Click Verify Tax. The use tax details for the bill calculate and display.
- If the amount of tax the vendor charged matches what AvaTax calculated, the accrual amount is 0.
- If the amount of tax the vendor charged is greater than what AvaTax calculated, the vendor may have overcharged you tax.
- If you click OK, the accrual amount is posted in the GL accounts selected in your configuration.