In your accounting software, calculate and verify consumer use tax, assign the use tax to an accrual account, and send the transaction to AvaTax for consumer use tax reporting. AvaTax settles your accounting software's GL accounts with the accrual amount accordingly.
- Using this feature may trigger additional fees. Talk to your Customer Account Manager (CAM) for more information.
- Consumer use tax isn't applicable to Canadian transactions
Calculate consumer use tax on transactions in the following ways:
- Calculate consumer use tax in your accounting software
- Import transaction details into AvaTax
Enable consumer use tax calculation in NetSuite
To enable and configure consumer use tax calculations in NetSuite, do the following:
- In NetSuite, go to Avalara > Setup > Configure Avalara. On the Consumer Use Tax/Input VAT tab:
- Check Enable UseTax Assessment on Vendor Bill, and the fields below become active.
- Select the appropriate Use Tax Payable Liability Account and GL Account to Debit. In GL Account to Debit, if you chose Select a Use Tax Debit GL Account, you also need to select the appropriate account from the Use Tax Debit GL Account drop-down list.
- Check Accrue Consumer Use Tax when a Vendor Bill is approved to enable the accrual of consumer use tax when a vendor bill is approved and then posted to AvaTax.
The consumer use tax accruals are now credited to the default Use Tax Payable Liability account set in your AvaTax configuration. View the GL impact entries on the AvaTax tab in the purchase invoice. Transactions deleted or voided in NetSuite are voided in AvaTax.
- In AvaTax for NetSuite go to Lists > Relationships > Vendors, click the Assess Use Tax on Bill (AVATAX) checkbox. If Assess Use Tax on Bill (AVATAX) checkbox is enabled, then this vendor is marked for Use Tax Assessment and you can use AvaTax to calculate the consumer use tax for this vendor's transactions. (The Assess Use Tax on Bill (AVATAX) option is available only if the Enable Use Tax Assessment on Vendor Bill is enabled in the Configure Avalara page. )
Calculate consumer use tax in NetSuite
After you enable consumer use tax calculation, the AvaTax calculated use tax amount for a transaction is calculated and the difference between the AvaTax calculated Use Tax & the Vendor charged tax amount is displayed. On approval, the AvaTax calculated use tax amount is posted to the NetSuite Dashboard as the Accrual amount. To calculate real-time consumer use tax:
In AvaTax for NetSuite, go to Transactions > Payables > Enter Bills and enter the details for a bill.
- Click Verify tax. The use tax details for the bill are calculated and displayed.
- 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 on the NetSuite Dashboard. If you click Cancel, the amount isn't posted.
- For a bill with use tax disabled for the vendor, after clicking on Verify Tax or Save, the message "This Document has not used AvaTax Services for Tax Calculation. Use Tax Assessment is disabled for Vendor" displays.