Setting Up Tax Agencies as Vendors
In most countries, businesses are required to collect tax from sales. Then, the collected tax must be paid to the tax authority on behalf of the customers. Default tax agencies are automatically set up by the system when you create a subsidiary or nexus, but you must edit the tax agency vendor record to provide details such as address information.
In a OneWorld account, multiple subsidiaries can pay taxes to the same tax agency. When you add a subsidiary, and its nexus is the same as that of an existing subsidiary, NetSuite creates a copy of the preferred tax vendor for that nexus to associate it with the new subsidiary. This copy (known as a child or shadow vendor) is necessary because tax agency vendors cannot be shared between subsidiaries. However, you can share non tax agency vendors with multiple subsidiaries. For more information, see Assigning Subsidiaries to a Vendor.
The child tax vendors that NetSuite creates when subsidiaries share a tax nexus are hidden, and therefore cannot be used directly in transactions.
Accounts associated with tax agency vendors are tax control accounts. If you want to attach an A/P account to a vendor, make sure the vendor type is not tax agency.
If you use tax codes in transactions, NetSuite posts tax to the appropriate tax agency associated with the subsidiary.
Do not use Write Check to pay a tax agency. If you want to pay liabilities to a tax agency, you must go to Transactions > Bank > Write Tax Liability , where you can select the appropriate tax agency in the Payee field.
An administrator can create a vendor record for a tax agency if necessary.
To set up a tax agency as a vendor:
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Go to Lists > Relationships > Vendors > New (Administrator)
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On the Vendor page, specify the governmental authority to which you must pay tax. For example, in the Vendor field, you can enter the name of the state or provincial tax agency where your business is located.
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In the Category field on the Info subtab, be sure to select Tax Agency.
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Enter any additional information as needed.
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Click Save.
You can select this tax agency when you set up tax preferences and tax codes.