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Why is the "DEFAULT TAXCODE TO" setting in Netsuite not changing taxcodes on invoices?

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Overview

The "DEFAULT TAXCODE TO" setting in Netsuite is set to New and Existing Customers, yet taxcodes are not changing on invoices to AVATAX.

Environment

Netsuite

Resolution

This setting will only change tax codes to AVATAX if the customer record has a blank TaxItem field.