Hello! Does anyone know what the 1099 or other tax implications are of setting up employees as vendors in netsuite?

IIRC NetSuite removed the automatic 1099 reporting a few years back and now you have to create your own anyways, so you'd have see how you all do your reporting to see whether that'd be impacted. FWIW, I've seen numerous companies that setup employees as vendors (including the one I'm at now). We only setup employees to create NetSuite user accounts. All the payroll and expense stuff goes to the employee's vendor record. But we use ADP and Concur for payroll and travel/expense, so YMMV if you're using NetSuite for more/different stuff.