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3. Install and Configure Avalara AvaTax for NetSuite

This article applies to:Avalara AvaTax for NetSuite

After you activate AvaTax and set up your company profile, install and configure AvaTax for your accounting software. During configuration, customize your setup to fit your unique business needs for things like:

  • Tax calculation settings for various tax types
  • Exemption settings if you have exempt customers
  • Product taxability settings

Alter these settings when your business needs change.

Install the AvaTax bundle

  1. Log in to NetSuite and go to Customization > Suitebundler > Search & Install Bundles.
  2. On the Search & Install Bundle menu, type AvaTax in the Keywords field, and then click Search.
  3. Choose AvaTax Basic or AvaTax OneWorld.
  4. On the Bundle Details page, click Install. The Preview Bundle Install page shows items to be added by the AvaTax bundle.
  5. In the Preference dialog box, find potential conflicts with elements or add-ons, and then select an action from the drop-down menus.
  6. Click Install Bundle.
  7. To see the progress of the installation, go to Customization > Suitebundler > Search & Install Bundles > List.

Create a tax code in NetSuite

AvaTax calculates sales tax in the United States and Canada. These steps are for the US; the steps are slightly different for Canada.

  1. In order to create a tax code in NetSuite, go to Setup > Accounting > Tax Codes > New, and then click United States. The Tax Code page displays.
  2. In Tax Name, type AVATAX.
  3. In Display Name/Code, type Sales Tax.
  4. In Rates, type 0.00.
  5. In Tax Agency, choose Avalara. If Avalara isn't in the list, add it now.
     
    1. To add Avalara as a tax agency, click +.
    2. In Category, click Tax Agency.
    3. In Company Name, type Avalara, and then click Save.
  6. In Tax Account, choose the tax control account where sales tax payable should accrue, and then click Save. If there's no tax control account, create a tax control account in NetSuite, and then try this step again.

Create a tax code in NetSuite OneWorld

AvaTax calculates sales tax in the United States and Canada. These steps are for the US; the steps are slightly different for Canada.

  1. In order to create a tax code in NetSuite OneWorld, go to Setup > Accounting > Tax Codes > New, and then select the country you want the new tax code to apply in. The Tax Code page displays.
  2. In Tax Name, type AvaTax.
  3. In Display Name/Code, type Sales Tax.
  4. In Rate, type 0.00.
  5. In Subsidiaries, choose one subsidiary per tax code. Create more tax codes if you want to calculate tax for multiple subsidiaries.
  6. In Tax Agency, choose Avalara. If Avalara isn't in the list, add it now.
     
    1. To add Avalara as a tax agency, click +.
    2. In Category, click Tax Agency.
    3. In Company Name, type Avalara, and then click Save.
  7. In Tax Account, choose the tax control account where sales tax payable should accrue, and then click Save. If there's no tax control account, create a tax control account in NetSuite, and then try this step again.

Configure the AvaTax integration

Once you've installed the AvaTax for NetSuite bundle, configure your company settings.

  1. Go to Avalara > Setup > Configure Avalara.
  2. On the Setup Assistant page, enter the Account Number and License Key you received in an email from Avalara. You used that email to activate your AvaTax account. The Username and Password are the same ones you use to log into your AvaTax account. Select whether the Service URL is for a Production or Development account, and then click Validate.

    NB_SA_Newuser1.png

  3. After you validate your account, complete the following steps:
    1. If the correct AvaTax Company Code/Name doesn't automatically appear in the drop-down, choose the correct company.
    2. During the installation, you created a tax agency named AVALARA and a tax code named AVATAX, so these options are enabled automatically:
      • Tax Agency (AVALARA) already created in NetSuite
      • Tax code (AVATAX) already created in NetSuite

        Basic_SetupAssistant_Page2_when AVATAX not created.png
  4. When you're finished, click Next. Don't click Create Company, because you created a company when you activated AvaTax.
  5. Add the required information on the following tabs on the Avalara Configuration page:
    1. The General tab:
      Item Specific:
      • Enable Tax Code Mapping: Enable if you want to map AvaTax codes to NetSuite items on the AvaTax tab for each item. In the list, if you select the blank option, then AvaTax for NetSuite doesn't automatically change the taxability of the customer transactions.
      • Override AvaTax TaxCode: Enable if you want to override your assigned Avalara tax code and send NT for non-taxable items. If this option is disabled, the assigned Avalara tax code is sent. In the list, if you select the blank option, AvaTax for NetSuite doesn't automatically change the tax code of the customer transactions if it already exists.
      • User Defined 1: Click to send non-tax data to AvaTax. Examples of this data are in the menu list.
      • User Defined 2: Click to send non-tax data to AvaTax. Examples of this data are in the menu list.
      • Send Item Account to Avalara: Click to send general-ledger account information for an item to AvaTax.
      Customer/Vendor Specific:
      • Customer Code: The item you select from the drop-down is sent to AvaTax and appears as the customer code on transactions. Most customers select Customer Internal ID, as this is the default selection.
      • Vendor Code: The item you select from the drop-down is sent to AvaTax and appears as the vendor code on consumer use transactions. Most customers select Vendor Internal ID, as this is the default selection.
      • Default Customers to Taxable: Select the default option that makes customers in NetSuite taxable when you add or save their customer record.
      • Default Tax Code To: Select the customers you'd like to consider taxable when you add or save customer records.
      • Enable Entity/Use Code: Enable to map entity/use codes for your customer addresses to flag them as exempt from sales tax.
      Miscellaneous Settings:
      • Default Shipping Code: What you enter here will be the default shipping code whenever you enter a shipping charge on a sales document. Before you select this option, ensure that the shipping codes are set up by going to Avalara > Setup > Shipping Codes. Ignore this field if your company doesn't use NetSuite’s shipping functionality.
      • Show Warnings/Errors: The selection you make here determines what is displayed on error logs.
      • Billable Time Name: Available options are Item Name and Billable Time. Select Billable Time to have AvaTax record billable time for items that you select instead of the item name mapped to a tax code.
      • Extensive Logging: Select this option to log AvaTax configuration changes.
    2. The Tax Calculation tab:
      • Disable Tax Calculation: If you choose to disable tax calculation, NetSuite no longer uses AvaTax to calculate tax on transactions.
      • Disable Tax Calculation for Quotes: If you choose to disable tax calculation for quotes, NetSuite no longer uses AvaTax to calculate tax on quotes.
      • Disable Tax Calculation for Sales Order: If you choose to disable tax calculation for sales orders, NetSuite no longer uses AvaTax to calculate tax on sales orders.
      • Disable Tax Calculation at line level: This setting affects only the frequency of tax calculations. If the Multiple Shipping Routes option is enabled in NetSuite, then regardless of this setting, AvaTax for NetSuite can source lines on transactions to different addresses.
      • Enable Logging: This function is primarily used for troubleshooting issues. If you choose to enable logging, all success, warning, and error messages are included in the log. Only enable logging if you have been instructed to do so by Avalara Support, as it can significantly slow down your service.
      • Calculate Tax on Demand: When enabled, a Calculate Tax button displays in sales documents in Edit view. Click this button to perform an instant sales-tax calculation.
      • Tax Included Capability: Click to add a checkbox to include sales tax in the Total Price field on sales documents. This reverses the tax amount from the line total and updates the line amount to reflect this. The total price on the invoice doesn't change even after tax is added.
      • Use Posting Period as Transaction Date during Tax Calls: Click to send the posting date as the transaction date instead of the header invoice date. The posting period is the first day of the selected month.
      • Disable Location Code
        • In NetSuite, if this option is disabled, the default address on this tab is sent as the origin address for transactions.
        • In NetSuite OneWorld, if this is disabled, the subsidiary address on this tab is sent as the the origin address for transactions.  
        • If this option is enabled, then for a transaction, the location code is sent based on the following conditions:
          • If the location code is added only at the header-level, then the Location name is sent as the Location Code for the transaction.
          • If the location code is added only at the line-level, then the Location name of the 1st line is sent as the Location Code for the transaction.
          • If the location code is added at both the header-level and the line-level, then the Location name of the 1st line is sent as the Location Code for the transaction.
      • Enable UPC Code as Item Code: Click to send a UPC instead of an item code to AvaTax. Using this feature may trigger additional fees. Talk to your Customer Account Manager (CAM) for more information.
      • Enable Discount Mechanism: Click to map discounts to an Avalara tax code. This is useful if you need to use nontaxable discounts, which don't affect the taxable amount of a line.
      • Discount Mapping: Select whether you want to discount the gross or net amount when you use the Enable Discount mechanism.
      • Discount Tax Code: Click to be able to select a tax code for discounts--in most cases, NT for non-taxable. 
      • Tax Rate: Select Show Base Rate to control whether the tax rate displayed factors in exemptions and partial taxability. 
      • Round-Off Tax Percentage (Decimal Places): Click to control the number of decimal places that display in a calculated tax rate--by default, 2 places.
      • Default Tax Code: In NetSuite OneWorld, select the company-specific tax code for each subsidiary. NSOW}}, select the company-specific tax code for each subsidiary. 
      • Default Tax Code Rate: In NetSuite OneWorld, select the company-specific tax code rate for each subsidiary. NSOW}}, select the company-specific tax code rate for each subsidiary. 
      • Addressee: Type the addressee address details. The Address field shows a consolidated view of the addressee address.
      • Validate Address: Click to validate the addressee address. 
      • Abort Save Operation on Tax Calculation Errors: Click to stop tax calculations that fail from saving the document for the following operations:
        • Bulk Billing
        • User Interfaces
        • Webservices
        • CSV Imports
        • Scheduled Scripts
        • Suitelets
        • Workflow action scripts
    3. The Consumer Use Tax / Input VAT tab: Use of this feature may cause you to incur additional fees. Talk to your Customer Account Manager (CAM) for more information. Consumer Use Tax isn't applicable to Canadian purchase transactions.
      Consumer Use Tax Assessment Settings:
      • Enable Use Tax Assessment on Vendor Bill: If enabled, NetSuite uses AvaTax to calculate consumer use tax on vendor use tax transactions.
      • Use Tax Payable Liability Account: Select the account to which you want to credit your vendor use liabilities.
      • GL Account to Debit: Choose either Individual Item/Expense Account or Select a Use Tax Debit GL Account
        • Individual Item/Expense Account: If this option is selected, the individual item or expense account details mapped to this vendor is used as the GL account to Debit
        • Select a Use Tax Debit GL Account: Select a relevant account from the Use Tax Debit GL Account drop-down list
      Accrue Consumer Use Tax when a Vendor Bill is approved: Click to enable accrual of consumer use tax when a vendor bill is approved and then post to AvaTax.  
      Auto Self Assess on Imported Vendor Bills: Click to enable self-assessment of consumer use tax on vendor bills imported from the webservices in order to automatically compare the tax calculated by your vendor with the tax calculated by AvaTax.

      Input VAT Verification Settings

      • Enable Input VAT Verification on Vendor Bill: Select to enable the Input VAT verification service for a vendor
    4. The Address Validation tab:
      • Disable address validation: If you disable address validation, AvaTax for NetSuite uses the customer's ship-to address to calculate the correct sales tax. Sales tax might be calculated incorrectly if this option is disabled.
      • Enable address validation on transaction(s): Click to create buttons for validating bill-to and ship-to addresses on transactions.
      • Track previously validated addresses: If you select this option, AvaTax informs you when an address has previously been validated.
      • Result in upper case: Click to save all address validation results in uppercase format.
      • Batch processing: Select Automatic to automatically accept address validation results when you process batches of transactions. Select Manual to manually approve the address validation results. 
    5. The About Avalara tab contains technical information about your connector/integration and your AvaTax account.
  6. Click Save to save the configuration settings.

Next steps

If you have Returns, this is a great time to set it up. If not, move on to assigning customers to AvaTax in NetSuite.

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