As long as you enable tax calculation and select AvaTax as the tax calculation method in your accounting software, AvaTax automatically calculates a sales or use tax rate on a variety of transaction types according to the taxability rules of those products (exempt customers aren't charged sales tax). Some of the transaction types AvaTax calculates tax for are:
- Orders/invoices/cash sales
- Return authorizations/credit memos/cash refunds
When you create one of these transaction types in your accounting software, AvaTax uses the customer's ship-to address to calculate the correct sales tax.
If you're applying discounts, remember:
- A header-level discount is applied to all taxable items in the transaction
- A line-level discount is applied to the item above the discount row
- If both a header-level and a line-level discount are applied, their cumulative discount is applied to the line item
Calculate sales tax using a ship-to address
In AvaTax for NetSuite, use a customer's ship-to address to calculate sales tax. Here's how:
- Create any of the above transaction types, click Address.
- Under SHIP-TO SELECT, select the ship-to address for the transaction.
- Click Save.
Calculate sales tax by latitude and longitude
If a customer has a location such as an oil-rig, drilling platform, or radio antenna that has no street address, calculate sales tax on that location using latitude and longitude coordinates. Here's how:
- In NetSuite, go to Lists > Relationships, and then click Customers.
- In the Customers pane, click Edit next to the customer for which you want to set up latitude and longitude coordinates. The entire customer record must be in edit mode to enter coordinates, otherwise you can only edit the address.
- In the Customer record, click Address.
- Next to the customer's address, type a coordinate in the LATITUDE field in decimal format. (To convert coordinates in degrees/minutes/seconds format to decimal degrees format, try the federal communication commission's latitude/longitude conversions site.)
- Type the customer's longitude in decimal format in the LONGITUDE field.
- Click Save. When you're finished, whenever you create a a transaction for this customer, AvaTax for NetSuite uses the latitude and longitude you specified to calculate the correct tax.
Calculate sales tax in your NetSuite Web Store
To calculate sales tax on orders in your webstore before you submit them to NetSuite, follow the steps below:
- In NetSuite, go to Setup > Site Builder > Set Up Web Site.
- Click Edit next to the website which you'd like to calculate tax.
- On the Setup tab, under Preferences, enable Scriptable Cart and Checkout.
- Click Save.
Adjust sales tax on credit memos
To adjust sales tax on credit memo transactions, ensure that the transaction has the following:
- An amount to be credited in the Tax Credit field
- A non-inventory item called Sales tax adjustment, with a line amount as 0
Once you create a credit memo, NetSuite sends a return invoice to AvaTax. Use the current day's date on the credit memo to avoid errors if the credit occurs in a locked period.
To adjust sales tax on credit memos, follow these steps:
- Go to Lists > Accounting > Items, and then click New.
- On the New Item page, under Non-Inventory Item, click For Sale.
- On the Non-Inventory Item for Sale page, create a non-inventory item called Sales Tax Adjustment. Go to the Sales / Pricing tab, and in Price Levels, type a Base Price of 0.
- Click Save.
- Go to Transactions > Customers, and then click Issue Credit Memos.
- On the Credit Memo page, add details. Ensure that:
- The amount to be credited is added in the Tax Credit field. This amount is used as the tax override amount.
- For a line item, the Item is selected as Sales Tax Adjustment and the line Amount is 0. If the line amount is not 0, then the "Sales Tax Adjustment's line amount should be zero" message is displayed.
- Click Save