NetSuite

NetSuite Sales Tax Integration Guide

Platform
NetSuite
Versions
2018.2+
Extension
SuiteApp.com
Last Updated
January 10, 2019

We put together this integration guide for NetSuite users looking to better understand TaxJar’s integration for sales tax calculations, reporting, and filing.

You’ll learn how TaxJar provides calculations directly through SuiteTax and syncs invoices, cash sales, and credit memos for reporting / filing. Along the way, we’ll configure your NetSuite account to collect sales tax where you have nexus, handle product / customer exemptions, and much more. For a primer on everything sales tax, read our Sales Tax 101 guides before getting started.

TaxJar for NetSuite requires a TaxJar Plus subscription. To sign up for Plus or upgrade your existing account please contact our sales team.

SuiteTax Requirement

To use TaxJar’s integration with NetSuite, you’ll need to enable SuiteTax for your NetSuite account. Keep in mind that SuiteTax is currently in beta with known limitations. Please review these limitations before continuing. If you have any questions, contact us before continuing this guide.

Behind the scenes, SuiteTax allows TaxJar to provide rooftop-accurate calculations down to the jurisdiction-level directly inside NetSuite. It’s an easier, more accurate way to calculate sales tax compared to the old way of manually adding state or zip-based rates (known as Legacy Tax). SuiteTax lets you use different tax calculation engines for nexuses and override tax details on transactions.

The SuiteTax feature must be shared to your NetSuite account before it can be enabled. Contact your NetSuite account manager and submit a SuiteTax enablement request with the help of NetSuite Customer Support. Your SuiteTax enablement request will be reviewed by the SuiteTax approval team. If your request has been approved, the SuiteTax feature will be shared to your NetSuite account.

Before you can enable the SuiteTax feature, your account must meet the following prerequisites:

  • For existing NetSuite accounts where migration of legacy records to SuiteTax is required, a Sandbox account must be available.
  • Backup of your entire NetSuite account must be requested.

Only administrators can enable the SuiteTax feature. To enable the SuiteTax feature, go to Setup > Company > Enable Features. Check the SuiteTax - Beta box on the Tax subtab, and click Save.

Getting Started with TaxJar

After enabling SuiteTax in your NetSuite account, you can install TaxJar’s NetSuite integration via SuiteBundler under Customization > SuiteBundler > Search & Install Bundles. Search for “taxjar” and install the TaxJar SuiteBundle.

Configuring TaxJar

Go to TaxJar > Setup > Configuration to connect your TaxJar account. Copy and paste your TaxJar API token:

TaxJar API Token

Next you’ll want to configure your tax settings. Enable calculations and/or reporting depending on the TaxJar features you want to use. Set a default payables and receivables account for calculations:

TaxJar Configuration

Finally, you’ll be asked to review your NetSuite nexuses and tax registrations prior to using the TaxJar integration:

TaxJar Configuration Summary

Configuring Nexuses for TaxJar

In order to calculate sales tax through SuiteTax, we’ll need to properly configure your NetSuite account to use TaxJar as the sales tax engine. Go to the TaxJar dropdown in your menu bar and select Nexuses:

TaxJar Nexus Dropdown

On the Nexuses page, set up all of the countries and regions where you need to collect sales tax. If you just migrated over from SuiteTax, you may already have existing nexuses:

NetSuite Nexuses

Make sure each subnexus has a valid nexus address:

Edit NetSuite Nexus

When making sales tax calculations, these nexuses are passed to TaxJar to determine where you have nexus. They’re also synced automatically to your TaxJar account.

Configuring Tax Registrations for TaxJar

After you’ve set up your nexuses, you’ll want to assign them to tax registrations under your business subsidiaries. Go to the TaxJar dropdown in your menu bar and select Subsidiaries:

TaxJar Subsidiaries Dropdown

Choose the subsidiary you’d like to use for TaxJar and click the Tax Registrations tab:

SuiteTax Tax Registrations

When adding a new nexus, make sure you choose TaxJar when selecting the tax engine for sales tax calculations.

Product Exemptions & Taxability

To assign a specific item in NetSuite to a TaxJar product category for exemptions, simply edit the item and click the TaxJar tab. Select a TaxJar category and save the item:

TaxJar Product Exemptions

You can review all of your categorized items under TaxJar > Reports > Exempt Items.

Customer Exemptions & Taxability

To exempt a specific customer in Netsuite for calculations and reporting, edit the customer and click the TaxJar tab. Check the TaxJar Exempt checkbox and select an exemption type from the dropdown:

TaxJar Customer Exemptions

If you decide to perform a mass update on your customer records to exempt a batch of customers from sales tax, you can backfill your customers by going to the TaxJar dropdown in your menu bar and selecting Backfill > Customers:

TaxJar Backfill Customers Dropdown

You can review all of your exempt customers under TaxJar > Reports > Exempt Customers.

Address Validation

TaxJar provides US address validation directly inside NetSuite to ensure valid addresses are sent to our API for accurate sales tax calculations. To set up address validation, go to Customization > Forms > Address Forms. Edit your existing custom form for the United States or create a new custom form by clicking the “Customize” link.

On the Custom Code tab, type in or select “tj_validate_address.js”:

TaxJar Address Validation Form

Next, add a new button to your custom address form under the Actions tab:

TaxJar Address Validation Button

Provide the following values in a new action row:

  • Label: Validate Address
  • Function: validateAddress
  • Display As: Button

You can now validate addresses anywhere in NetSuite! Upon clicking the “Validate Address” button, we’ll automatically clean up the address and add a ZIP+4 postal code:

TaxJar Address Validation

Sales Tax Calculations

TaxJar directly integrates with SuiteTax (Beta) and provides sales tax calculations for the following records in NetSuite:

  • Quotes
  • Sales orders
  • Invoices
  • Cash sales
  • Credit memos
  • Cash refunds
  • Return authorizations

Before making a calculation, TaxJar requires a valid shipping address and one or more line items in a given record. After providing this information, click the Preview Tax button to get a summary of sales tax organized by jurisdiction:

SuiteTax Sales Tax Summary

For US calculations, this summary may include state, city, county, and district tax. In Canada, GST / PST / QST amounts. In other countries, VAT will be listed. You’ll also notice the tax is broken out for each line item under the Tax Details tab:

SuiteTax Tax Details Tab

Once a record is processed, the underlying tax types and tax codes may be referenced in your NetSuite Tax Report under Reports > Financial > Tax Report. You can review the underlying API requests and responses under TaxJar > Reports > Logs to verify calculations.

If you save the record before previewing tax, don’t worry. TaxJar will automatically calculate sales tax after you save a record.

Backup Rates

When sales tax is previewed or calculated, a request is made to our API through SuiteTax. In the unlikely event that our API is unavailable (we boast 99.99% uptime), we’ll apply a backup rate as a fallback to ensure you collect sales tax. A backup rate is an average tax rate across all postal codes in a given region or country.

After configuring the integration, we’ll retrieve backup rates for every region and country we currently support and store the rates directly inside NetSuite. Each month we’ll update the rates using a scheduled script for accurate backup calculations.

TaxJar Backup Rates

You can review the current backup rates under TaxJar > Reports > Backup Rates.

Sales Tax Reporting

TaxJar automatically syncs invoices, cash sales, credit memos, and cash refunds for sales tax reporting and filing. This is done automatically behind the scenes when one of these records is created or updated inside NetSuite. To backfill older transactions from NetSuite into TaxJar, go to the TaxJar dropdown in your menu bar and select Backfill > Transactions:

TaxJar Backfill Transactions Dropdown

From there, use the datepickers in the From Date and To Date to select a date range of transactions to backfill:

TaxJar Backfill Transactions

Click Sync to TaxJar and transactions with a transaction date within that range will be queued for syncing. To monitor the queue system, go to TaxJar > Reports > Queue to view pending, processed, and invalidated transactions:

TaxJar Queue Report

You can browse and filter through all of your synced transactions under TaxJar > Reports > Synced Transactions:

TaxJar Synced Transactions Report

Wrapping Up

Congratulations, you’ve finished setting up TaxJar and NetSuite! At this point you should be collecting sales tax in NetSuite and syncing transactions for reporting / filing.

Current Limitations

The following items are currently unsupported by TaxJar in NetSuite:

  • If “Item Line Shipping” is enabled, TaxJar will use the first line item shipping address for calculations and reporting. At this time, TaxJar does not support multiple shipping addresses through our API.

TaxJar requires SuiteTax to provide rooftop accurate sales tax calculations at the jurisdiction level. Review the known limitations of SuiteTax in the NetSuite Help Center prior to installing SuiteTax.

Integration Changelog

Curious to see what’s changed with our integration lately? Read on to learn more!

v0.5.0 - 2019-01-10

  • Initial release of our NetSuite integration. Sales tax calculations powered by SuiteTax for rooftop-accurate rates down to the jurisdiction level. Transaction sync and backfilling. Supports product exemptions, customer exemptions, shipping taxability, sourcing logic, and address validation.
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