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Why does the Netsuite AP integration use tax overrides?

Overview

It is unusual that tax overrides are used for all AP tax calculations in Netsuite.

Environment

Netsuite

Resolution

AvaTax AP tax calculations (in the US) are meant to record Consumer Use Tax accrual so that Avalara can report and remit it in returns.

Currently, the way AP is working with AvaTax is:

  • You supply a vendor charged tax, and then AvaTax calculates tax and then shows the difference as the accrual (tax to be reported). Please note that the vendor charged tax in Netsuite is always $0.00. But, that is not the case in other AP integrations we have.
  • Since consumer use tax reporting is the amount of tax that was missed by the vendor bill (all of it is missed how Netsuite handles it), AvaTax needs to use tax overrides. This leads to the tax amount only existing at the header level in AvaTax. No tax is assigned to any specific lines.
  • The AvaTax service is expecting tax overrides to be used for AP calculations like this. It is important for our system that the tax calculation use a tax override. So, even though Netsuite has a situation where it doesn't need to use tax overrides to have the accurate amount to accrue, we still use tax overrides to accommodate our filing process.