Creating a Tax Agency Vendor Record
In most locations, you are required by government to collect tax from your customers when you sell merchandise. Then, you pay that tax on their behalf to the taxing authority. In NetSuite, you can set up sales tax items and sales tax vendors to simplify the sales tax collection and payment process.
In a NetSuite OneWorld account, multiple subsidiaries can pay taxes to the same tax agency. Tax agency vendors cannot be shared between subsidiaries. Therefore, NetSuite creates a copy (child or shadow vendor) of the preferred tax vendor for that nexus to associate it with a new subsidiary. The child tax vendors that NetSuite creates when subsidiaries share a tax nexus are hidden and therefore cannot be used directly in transactions. You can, however, share non tax agency vendors with multiple subsidiaries.
For more information, see Assigning Subsidiaries to a Vendor.
To create a tax agency vendor record:
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Go to Lists > Relationships > Vendors > New.
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On the Vendor page, create a record for the governmental authority to which you pay sales tax.
For example, in the Vendor ID field, you can enter the Secretary of State where your business is located.
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In the Category field, under Primary Information, be sure to select Tax Agency.
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Enter any additional information.
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When you have finished, click Save.
After this vendor is set up, you can create tax codes that you associate with the sales tax vendor. Go to Setup > Accounting > Taxes > Tax Codes > New.
You must identify a vendor as a tax agency to ensure that it appears as such in accounting lists. For example, you want to display Tax Agency next to a vendor's name on the Vendors list page. Go to Setup > Accounting > Accounting Lists > Vendor Category, and then check the Tax Agency box.
As you create invoices and cash sales receipts, NetSuite sums the tax for each transaction. It shows it on the invoice or receipt as a line item.
As sales tax becomes due, you can pay it by going to the Sales Tax Payment page. Go to Transactions > Bank > Pay Sales Tax.