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Handling Taxes

Rameez Zari
  • Updated

Overview

NetSuite has its own native tax engine for handling tax associated with an order. At times you may run into situations where the calculated tax within the NetSuite is different from the tax details shared by Magento 2. It is possible that the tax total might not match between the two systems if information such as tax tables between both systems do not match. This could become a major hassle for your accounting teams to match the sales tax for each order and be able to remit the correct amounts to the respective states. After each order is imported into NetSuite, the integration app immediately compares the calculated tax totals with what was sent from Magento 2. If there is a difference between the tax values calculated by NetSuite and the values sent from Magento 2, the difference is stored in the ETAIL TAX TOTAL VARIANCE custom field on the sales order. You may report on these fields in NetSuite on a periodic basis and adjust your General Ledger with a journal entry if variance values exist.

The Magento 2 - NetSuite integration app has been designed to help you manage taxes in a way to avoid any tax variance that is recorded within the NetSuite Sales Order record. To properly map taxes and account in NetSuite and Magento 2, go to Settings > General > Tax of your integration app.

This feature has been designed to help you manage tax within the integration app in a way to avoid any tax variance which is recorded within the NetSuite’s sales order record. To properly map taxes and accounts in NetSuite and Magento 2 as to how much tax was paid per order, go to the General section > Tax tab.

Magento 2 - NetSuite

General__Tax.png

The Tax tab primarily contains the How would you like to bring sales tax into NetSuite? setting. This setting field enables you to choose your preference for mapping tax totals between NetSuite and Magento 2. The setting consists of the following options:

The field consists of the following options, which are discussed in the sections below.

Option 1: Overwrite taxes with Magento 2 tax amounts

The leading practice is to use this option.  When you select this value in the How would you like to bring sales tax into the NetSuite setting, the following new fields are displayed which allows you to control the way tax information is updated in NetSuite.

Per-line taxes on transaction enabled in NetSuite

Enable this setting if you want the tax code and the tax rate to be displayed at the line-level for every item associated with the Sales Order. However, you must also ensure that in NetSuite, the PRE-LINE TAXES ON TRANSACTIONS checkbox is selected at Setup > Accounting > Taxes  > Setup Taxes.

The Set Up Taxes page is displayed. Select the Per-Line Taxes ON Transactions field.

If PRE-LINE TAXES ON TRANSACTIONS is selected, the total tax is calculated for every item in an order and individual tax code and tax rate are displayed for every line item. Otherwise, the total tax is calculated for the entire Sales Order and one tax code for the entire order is applied.

Note: Magento tax rate will be used to calculate the tax amount..

Default tax code when no match is found in NetSuite

Enter the internal id of a tax code to be assigned to each order or line item for every order received from Magento 2. The value that you provide here is used, by default, when NetSuite is not able to identify and apply a valid tax code for an order.

Notes: 
  • This is a mandatory field.
  • This field does not impact tax code applied on an order when NetSuite’s native tax engine is able to find and apply a tax code for an order.
  • The tax rate is always calculated based on the total tax and the total order cost coming from Magento 2.
  • Avoid using -7 as it is the internal id of the “Not Taxable” code in NetSuite.

To find the internal ID of a tax code:

  1. In NetSuite, go to Setup > Accounting > Tax Codes. The Tax Codes page is displayed.
  2. Select the internal ID of an existing tax code that you wish to use in the integration app. Or, create a new tax code to be used when NetSuite fails to find a tax code corresponding to the shipping address on the order.

Assign the default tax code to all orders

When you enable the Assign the default tax code to all orders checkbox, the integration app will apply the tax code specified in the Default tax code when no match is found in NetSuite field to all Magento 2 orders. 

Notes: 
  • Even when NetSuite is able to identify a tax code to be applied for an order, the integration app will force apply the default tax code to all orders.
  • In case when there is no tax information present in the order, the sales order record in NetSuite is still updated with the default tax code and the tax rate will always be updated as Zero.

Option 2: NetSuite calculates taxes using its own tax engine

When you select this value in the How would you like to bring sales tax into the NetSuite setting, the integration app will not influence the tax calculation for an order. In this case, NetSuite’s native tax engine will be used to calibrate the tax code and tax rate for an item.

Option 3: Add total tax against a single line item on the order

When you select this value in the How would you like to bring sales tax into the NetSuite setting, the following new fields are displayed which allows you to control the way tax information is updated in NetSuite. If this field is selected, the total tax is calculated based on the Magento tax rate and the amount is entered against the non-inventory item you select below.

Per-line taxes on transaction enabled in NetSuite

Enable this setting if you want the tax code and tax rate to be displayed at the line-level for an item.

Note: The tax total and tax rate are displayed as zero at line-level..

You must enable this field only if taxes are enabled in NetSuite at the line-level. To enable this setting in NetSuite, go to Setup > Accounting > Taxes  > Setup Taxes. The Setup Taxes page is displayed. Select the Per-Line Taxes ON Transactions field.

NetSuite item to track Magento 2 tax amount as a line item

This is a mandatory field. Select the non-inventory type NetSuite item to track the total sales tax in Magento 2 against line item present in the Sales Order. This selected item will be used to create an additional line item record within the Sales Order.  This additional item amount which is the tax amount, is then added to the total cost. 

Note: The tax total and tax rate are displayed as zero in this case..

Select Tax Inclusive Stores

Select Magento stores where the tax amount is included in the product price. By default, all the Magento stores are considered to be Tax Exclusive (The tax amount is not included in the product price).

  • If you are unable to see any Magento stores in the text area, click the refresh icon.
  • On the Mapping screen of the Magento Order to NetSuite Order Add flow, you must map items[*].original_price (Magento) to Items:Price (NetSuite).
  • If you are using Shipping Cost as a line item and the Shipping Cost for the selected store(s) also includes the Shipping Tax, use the following handlebar expression on the Mapping screen to map Items:Price (NetSuite).

{{#compare items[*].celigo_line_item_type_id "==" "Celigo_ShippingItem"}} {{subtract items[*].original_price items[*].tax_amount}} {{else}} {{items[*].original_price}}{{/compare}}

 

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