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Why is there no tax on an invoice with the entity use code G?

Overview

An invoice in Netsuite has an entity use code G on it and there is no tax and you want to why.

Environment

Netsuite Basic

Resolution

  • The entity use code G indicates the transaction is exempt from tax because the customer is a reseller.
  • Typically resellers are exempt from tax because they will resell the item to an end consumer who will pay tax on the final sale.