How do you handle U.S. sales tax in NetSuite? There are essentially three options: 1) LegacyTax, 2) SuiteTax and 3) third-party integration. Here is my over-simplified guide on when to use each:
Third-party integration
- Do you want a platform that will complete sales tax reporting?
- Should you be utilizing “geolocation” for determining sales tax nexus?
- Do your products and/or services have difficult-to-maintain, unique sales tax rules per nexus? Or product/service taxability that depends on use?
SuiteTax
- Do you have nexus and ship to any states with destination-based taxation? That is all* states except the following:
- Origin-based states: AZ, IL, MS, MO, NM, OH, PA, TN, TX, UT, VA
LegacyTax
- Are your sales primarily tax exempt?
- Do you have nexus strictly in an origin-based state (see above list)?
- Can you record a single sales tax code per customer (to be defaulted on all customer transactions)?
*CA is a mixed sourcing state – not strictly origin- or destination-based. If you have nexus and sales in CA, that would push you toward SuiteTax over LegacyTax.
