On journal transactions, we can specify the nexus, tax account, and tax code. When you save the journal transaction, the system looks at the tax type set on the tax code record, and tries to post the taxes to the tax account specified on the journal.
To successfully save the transaction and post the taxes, the following conditions must be met:
- A tax agency is set on the nexus record, and
- The tax account is set as a Payables Account or Receivables Account for the nexus on the tax type record.
If one of the said conditions is not met, the transaction will not be saved