Single Nexus Validation for Transactions in NetSuite 2023.1

TL;DR Opening

Starting in NetSuite 2023.1, Single Nexus Validation for Transactions has been introduced to enforce tax compliance. This ensures that each transaction can only apply one nexus when dealing with line-level locations or shipping. By validating nexus consistency across transaction item lines, organizations can reduce compliance errors and streamline their tax processes.

What is Single Nexus Validation?

Single Nexus Validation is a feature in SuiteTax that guarantees only one nexus is applied per transaction when specific configurations are in place. This validation becomes crucial when line-level locations or shipping is utilized. The process helps maintain tax compliance and ensures that organizations only collect and report taxes appropriately according to local regulations.

How It Works

The validation process works under the following conditions:

• Multiple Shipping Routes feature is enabled.
• The Enable Item Line Shipping box is checked on the transaction.
• The transaction form includes the Location field at the line level.

When a transaction is created, NetSuite determines the nexus based on the first item line. All subsequent item lines must match this original nexus. If any item line presents a different nexus, the transaction cannot be saved until the discrepancies are resolved.

Example Scenarios

Here's how the Single Nexus Validation operates with line-level location settings enabled:

1. Transaction Nexus Set to UK

   • Location (header): New York
   • Location (line level): UK
   • Ship to (header): Texas
   • Ship to (line level): N/A
   • Outcome: Valid, all lines are consistent.

2. Inconsistent Item Line Leads to Rejection

   • Location (header): New York
   • Location (line level): N/A
   • Ship to (header): Texas
   • Ship to (line level): N/A
   • Outcome: Not allowed; a separate transaction is required if a different nexus is involved.

3. New York Nexus Scenario

   • Location (header): New York
   • Location (line level): Germany
   • Ship to (header): Texas
   • Ship to (line level): N/A
   • Outcome: Not allowed; must create a separate transaction due to nexus inconsistency.

Best Practices

• Always ensure all line items on a transaction reflect the same nexus to avoid errors during processing.
• Regularly review transaction forms and settings related to shipping and location to maintain compliance.
• Use the validation feature proactively when configuring transactions that might involve multiple shipping routes or locations.

Who This Affects

• Administrators: Responsible for configuring tax settings and ensuring compliance.
• Developers: May need to integrate or customize transactions based on the single nexus validation.
• Accountants: Must understand how this affects tax reporting and compliance within their operations.

Key Takeaways

• Single Nexus Validation ensures transactions have only one nexus to maintain tax compliance.
• Triggered under specific feature configurations, including item line locations and multiple shipping routes.
• Ensures that organizations can streamline processes and reduce compliance errors effectively.
• Administrators should configure settings that account for line-level locations to utilize this feature effectively.