You are creating an invoice or sales order and receive error "Taxcode is not set to AVATAX or the Tax rates are not equal to zero for all the line items" under the AvaTax tab of the NetSuite document.
- Ensure the Tax Item field (''Financial' tab) of the customer record is set to ‘AVATAX’ for a US customer. For a Canadian customer the Tax Item should be 'AVATAX-CAN'.
Ensure the "Default Tax Code" is set to "AVATAX" (all caps) not "Avatax" in the Avalara Configuration. Go to Avalara > Setup > Configure Avalara > Tax Calculation.
- Ensure the tax code is set to 'AVATAX' or '-Not Taxable-' for all items. These tax codes will make a call to the AvaTax service. Anything else will not use the AvaTax service.
- '-Not Taxable-' is a native NetSuite tax code.
If invoicing Canadian customer, ensure you are using the correct Tax Code & Tax Group for Canada. See Create Tax Codes for Canada
If invoicing Canadian customer in the US, ensure Nexus for US address is added to the Canadian subsidiary. Hence the form for US address tax calculation is getting loaded.
Steps to add Nexus to Subsidiaries in NetSuite OneWorld:
Go to Setup–> Company–> Subsidiaries
Edit the Canada subsidiary
Under Nexuses sublist add the nexus for US address and any other state you would be calculating tax.
For more information see, NetSuite