+6
Hello,
As I am quite new into the US taxation system, I do not understand how the posting of a supplier invoice with use tax should look like.
Are there multiple ways to post the use tax? Could anybody help with an example?
I have done some tests but I’m not sure that this posting is correct and this is now it should look like.
Hello
Records look correct to me. If you dont want to see IP3 posting row with 0, you can enter N tax code or dont enter any tax code at all.
Keep in mind that sales tax is a little complicated in the US therefore you may need further assistance in case you want to implement sales tax.
For your info
+6
Hi
If I enter N tax code, IP11 is not triggered anymore because it will be No Tax instead of Use Tax as Tax Type.
Hi,
I’m from the US -
Use tax like you noted is a bit “special” Use tax is a situation where you were not charged tax by the supplier, yet the item (service or part) should have been taxed. In this case, when processing the use tax on a supplier invoice we need to create a tax liability (your IP11). That tax liability is not paid to the supplier but is posted to a tax payable account (typically separate from the AR tax payable). Like a sales tax, the use tax is still a tax and is expensed. In a traditional sales tax, the tax is paid to the supplier - Use tax is “special.”
The key points in use tax, is you still owe for the tax, but you don’t pay the supplier, you pay the tax periodically to the appropriate tax agency.
The postings are mostly OK, your Trade account is affected by the value of the goods (no tax) and you have a liability for the tax. I note that your IP3 posts to a tax payable. Typically, in US from an AP side, we have tax expense for the IP3, not the tax liability.
Hope this helps.
Enter your username or e-mail address. We'll send you an e-mail with instructions to reset your password.
