How do I resolve the 'Invalid Canadian Tax Code' error in NetSuite?
Overview
You are creating an Canadian order but receive an error 'Invalid Canadian Tax Code: AVATAX'.
Environment
NetSuite
NetSuite OneWorld
Resolution
In order to calculate tax in Canada, create two tax codes (one for PST and one for GST), and then group them. See Create Tax Codes for Canada.
- For tax calculation Avalara looks at the addresses on the customer record, invoice and location. Also, we check the Tax Item ('Financial' tab) on the customer record.
- When you select a Canadian customer to invoice you should notice the Summary section of the invoice reflect 'GST/HST" and 'PST'. If the form doesn't update after selecting the customer, please check the address field.
- Under the ''Financial' tab of the customer record. The Tax Item should be ‘AVATAX’ for a US customer. For a Canadian customer the Tax Item should be 'AVATAX-CAN'.
- On a Canadian invoice, when adding a line item, the tax code should auto populate with ‘AVATAX-CAN’. On a US invoice, when adding a line item, the tax code should auto populate with “AVATAX’.
Note: For NetSuite OneWord, if you ship to addresses in other states/provinces, ensure Nexus is added under the Subsidiary's nexus. Go to 'Setup' > 'Company' > 'Subsidiaries'.