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Does AvaTax Tax Calculation Trigger on the Tax Code "-Not Taxable-" in NetSuite?

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Overview

You want to know if an AvaTax tax call is triggered on the Tax Code "-Not Taxable-" in NetSuite?

Environment

NetSuite

Resolution

-Not Taxable- is a native NetSuite tax code that some users assign to customers they do not want to make Taxable. There are usage implications for using the -Not Taxable- tax code in conjunction with Avatax.

  • The -Not Taxable- tax code native tax code within NetSuite will trigger tax calculation if AvaTax is enabled.
  • This is a NetSuite design constraint. Users will want to change the tax code to something OTHER than AVATAX or -Not Taxable- to prevent tax calculation from occurring.
    • You will need to create a new tax code in NetSuite. In NetSuite, go to Setup > Accounting > Tax Codes > New
  • You may receive error "This Document has not used AvaTax Services for Tax Calculation. Taxcode selected is not an AVATAX Taxcode". 
    • If so, please click here

NOTE: this is not recommended for users who are also using the Avalara Returns service to file their sales tax returns. This can cause incorrect reporting of total sales amounts.