The leading practice for taxes is to have NetSuite calculate the tax code and rate for an order based on that order’s shipping address and have FarApp overwrite the NetSuite tax rate with the rate that was charged on the marketplace/cart. NetSuite doesn’t allow explicitly overwriting the tax amounts but only the rates, which is why this is the leading practice.  It is important to ensure what the customer was charged in the marketplace is what gets posted to NetSuite, so we do not post the tax rate from NetSuite to the marketplace.  While NetSuite's tax calculations will often match the rate used by your marketplace/cart, there can be situations where your marketplace/cart charges a slightly different rate than NetSuite does. With this approach, there will never be a discrepancy between your marketplace/cart and NetSuite on taxes. Even if your marketplace/cart’s calculation was incorrect, the order totals in NetSuite (including taxes, discounts, etc.) should match what your customer paid, and that’s why it’s the leading practice.

 

Configure NetSuite to Automatically Look Up the Tax Code

NetSuite Configuration

1. In NetSuite, navigate to Setup > Accounting > Set Up Taxes
2. Check the box labeled Enable Tax Lookup on Sales Transactions
3. Check the box labeled Customers Default to Taxable
1. If you have existing customers in NetSuite, please make sure that they’re set to Taxable
4. Check the box labeled Items Default to Taxable
5. Select Always from the Charge Sales Tax on Store Orders drop-down.
6. Click Save.

 

Configure Shipping Tax (only applicable if you are selling in a state that is charging shipping tax)

 

NetSuite Configuration

1. In NetSuite, navigate to Lists > Accounting > Shipping Items
2. Click on Edit for the shipping item, then go to the Shipping and Handling Rules tab and check the box labeled CHARGE TAX ON THIS SHIPPING PORTION OF ITEM.
3. Click Save.
4. If you charge shipping in some states that charge shipping tax and some states that don’t, you’ll need to configure an additional tax schedule in NetSuite. This schedule will only charge tax in those states that charge shipping tax and you’ll want to configure all your shipping items to utilize this tax schedule.

 

How to Check If Line Item Taxes are Enabled in NetSuite (this is usually leading practice)

 

NetSuite Configuration

1. Navigate to Setup > Accounting > Set Up Taxes
2. If PER-LINE TAXES ON TRANSACTIONS is enabled, then you have line item taxes enabled in NetSuite.

 

FarApp Configuration

Note: This is a global setting which means enabling it on one connector will apply it to all connectors and channels.

1. Navigate to your FarApp Tax Settings.
2. If PER-LINE TAXES ON TRANSACTIONS is enabled in your NetSuite check the box labeled NetSuite line item taxes enabled. 
3. Click Save. 

 

VAT Configuration (only applicable if you charge VAT)

Most marketplaces/carts (e.g. Amazon) already include VAT in the prices on items. NetSuite's default behavior is to add the VAT to the item again. This will cause you to have twice the real VAT amount in NetSuite so FarApp will need to subtract the VAT before NetSuite re-adds it which will result in the correct VAT total.

 

FarApp Configuration

Note: The following VAT settings are global settings which means enabling them on one connector will apply them to all connectors and channels.

1. Navigate to your FarApp Tax Settings.
2. Check the box labeled Subtract VAT from order total when posting.
3. Enter a value in the VAT Rate for this Account field.
4. Click Save.

 

Marketplace State Tax Remittance

Certain marketplaces - namely Amazon and Walmart - are required to collect and remit state sales tax for you. For these orders, FarApp automatically detects when these marketplaces have already collected and remitted tax. FarApp then posts the order to Netsuite with a tax rate of 0.

You can learn which states these marketplaces collect taxes for in the following articles:

Walmart: https://support.farapp.com/hc/en-us/articles/360025663374-Walmart-State-Tax-Remittance

Amazon: https://support.farapp.com/hc/en-us/articles/360025663574-Amazon-State-Tax-Remittance 

 

Troubleshooting Errors

Please refer here for guidance on resolving tax errors.

 

Next Steps

If you are setting up Discounts, please proceed with Step 2: Order Sync Discounts. Otherwise, you can proceed with Step 3: Order Sync Mappings.