In recent days, sales tax and sales tax returns are getting complex. When all the businesses are getting online, it is more difficult to manage the tax issues. NetSuite Sales Tax is a boon for these businesses as it has the features which can automate and ease the sales tax process for these vendors.
What is NetSuite Sales Tax?
NetSuite has a built-in module for sales tax, for any kind of purposes and intents. They will precisely calculate the sales tax for all the transactions that happened in the software.
Tax codes and Tax groups
There are two important distinctions in the NetSuite i.e. tax codes and tax groups. Tax groups are the combination of several tax codes that can be applied in one transaction, even if they are paid to different jurisdictions.
You can use tax codes in your transactions but for that, you need to set some prerequisites like tax periods, tax types, tax schedules, and accounting period.
How to do it?
- Tax Schedule: There needs to be a predefined tax schedule in items as some of them don’t have the taxes in some particular states. This feature helps in calculating the taxes for those particular items
- Item: Go to list, press accounting, and then items and then on new. Choose Subsidiaries in which the item has to be present for purchase or sale. In the Accounting subtab, choose the tax schedule which is applicable for that of the item. Only the items which belong to transaction subsidiary will be displayed
- Sales Order: Get to Transactions > Sales > Enter sales orders. In the sales order, when you select the customer and then the customer subsidiary will automatically set it by default. Only those items will be displayed which have a subsidiary. After this, an editable price will be set for these items. Tax codes will be available for all the selected subsidiary nexus. The tax amount collected will be deposited in the tax account of their respective tax agencies.
- Purchase Order: Go to Transactions > Purchases > Enter Purchase Order. In the purchase order, when you select the vendor, the subsidiary for vendors will be set automatically. Only those items will be displayed which have a subsidiary. After this, an editable price will be set for these items. Tax codes will be available for all the selected subsidiary nexus. The tax amount collected will be deposited in the tax account of their respective tax agencies.
How to import the sales tax table in NetSuite?
- In the software go to Setup, open Accounting, click on Taxes, then open Use State Sales Tax Tables
- Select the state in State drop-down list from State Tax Import Page where you want to import tax tables
- Then select any tax account and tax agency for every type of tax
- Press on the Save option
After importing the NetSuite Sales Tax, NetSuite sends an email to confirm any of the ID provided on the company information handles or pages.
It is important to enter the tax codes if there are any changes made manually in your tax table again. Also, if you run a web store, NetSuite can automate to match your consumer’s ship-to address with the sales tax code matching closely and then calculate the correct amount of sales tax.
How to edit a sales tax code in NetSuite?
- Go to Setup and then click on Accounting, then go to Taxes and then on Tax Codes.
- Press on Edit which is next to the tax code which you want to update
- Make all the necessary changes in the tax code record
- Click on the Save button.
It is very important to understand the concepts of sales taxes for businesses as it is a major concern in the economy. NetSuite sales tax proves out to be one of the best ways for companies regarding sales tax.
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