Learn Taxes Calculation In Transactions

To use tax codes in transactions you need to setup some prerequisites like accounting periods, tax periods, tax nexus, tax types, tax codes , tax schedules.

Process :

1. Tax Schedule :
   You need to define tax schedule in item as some items don’t have taxes in some states.It helps in calculating taxes according to nexus and tax schedules. For creating new schedule check Setting up Nexus and Taxes in NetSuite.
2. Item :
   Go to List > Accounting > Items > New

• Select the subsidiaries in which this item needs to be available for sale or purchase.
• In the accounting subtab select the tax schedule applicable for that item.
• Items belonging to transaction subsidiary only will be displayed in transactions.

3. Sales Order
Go to Transactions > Sales > Enter sales orders.

•  In sales order on selecting the customer then customer subsidiary will be set by default.
• Items belonging to that subsidiary will be displayed in items list for sale.
• On selecting item prices will be set from item record and which can be edited.
• Tax codes of selected subsidiary nexus will be available for selection.
• All the tax amounts collected will be deposited to tax accounts of respective tax agency.

4. Purchase Order
Go to Transactions > Purchases > Enter Purchase Order.

• In purchase order on selecting the vendor then vendor subsidiary will be set by default.
• Items belonging to that subsidiary will be displayed in items list for purchase.
• On selecting item prices will be set from item record and which can be edited.
• All the tax amounts collected will be deposited to tax accounts of respective tax agency.

Tax codes helps in calculating tax amounts and those amounts can be deposited in tax control accounts which helps in generating tax reports and calculation of tax amounts to be submitted to government revenue department.