Tax schedules are required in accounts that use the Advanced Taxes feature. Tax schedules determine how NetSuite calculates taxes for items in each nexus. The Tax Schedule field on an item record is located in the Accounting subtab under Tax/Tariff Information.
Most countries charge goods and services a the same rate across the entire country, so there's no need for tax schedules. In the U.S. and Canada, some goods and services are not taxable in certain states and provinces, so a tax schedule is useful.
To create a tax schedule, follow these steps:
- Go to Setup > Accounting > Tax Schedules > New.
- In the Product field, enter the name of the tax schedule that you want to associate with an item.
- When you create or edit item records, you can select the name of the tax schedule in the Accounting subtab.
- Enter a description for this tax schedule.
- If you have nexuses in the United States, click the US Nexuses subtab, then select the box in the Taxable column next to each state where these items are taxable.
- If you have nexuses outside of the United States, click the Non US Nexuses subtab, then select the sales and purchase tax codes to be used when charging customers with shipping addresses in those countries.
- Click Save.