What is the procedure to record the Sales Tax paid to vendor when purchasing inventory.
Any assistance will be appreciated.
Thanks.
What is the procedure to record the Sales Tax paid to vendor when purchasing inventory.
Any assistance will be appreciated.
Thanks.
Hi Allmer Consult, if you are making purchases for inventory, I'm assuming these items are for resale or used in the manufacturing process. In that case, my first suggestion would be to give your vendor…
For another client, we wrote a custom report that determined what percent of the total order was represented by each line item, and then the percent was used with the total sales tax to figure out what…
For our clients, if the purchase is for your internal use, we set up a G/L Account called USE TAX, and place it in the Expense Category. If the purchase is for something that you are reselling, then we roll the value of the tax into the value of the item being purchased. Please reach out to us for additional assistance with this, https://pcosupport.com.
Hi Allmer Consult, if you are making purchases for inventory, I'm assuming these items are for resale or used in the manufacturing process. In that case, my first suggestion would be to give your vendor a resale certificate, so they will stop charging you sales tax.
The purchase is for item (Inventory) that we resell.
We have paid sales tax along side with the cost of the inventory to our supplier. when we sell the item and change our customer sales tax, the sales tax will constitute sales tax payable (to be remitted to tax authority).
Now, how do we account for the sales tax that we have paid?
Thanks for your help.
hello termerins, if we pay sales tax for numerous re-sale items, but the tax is not broken down per item, is there a short cut to roll-up this tax into the item purchase price? I am alluding to perhaps a COG account called "sales tax". Otherwise, it's a super pain to apportion this tax across forty items. understandably this COG sales tax account wouldn't necessarily apply to a given COG department but at least we could see what it amounted to collectively and its impact on overall sales. What are your thoughts?
thanks
Give the vendor a tax exemption form. Don't pay the tax at the time of purchase.
For another client, we wrote a custom report that determined what percent of the total order was represented by each line item, and then the percent was used with the total sales tax to figure out what the landed total for each line item was. Of course, the client then would then edit their Purchase and change the total on each line to match the custom report calculations, but at least they didn't have to figure that out on their own manually. Otherwise, there aren't any other shortcuts to determine landed cost within Sage 50. Please let us know if we can be of any other assistance. https://pcosupport.com
Got it, this is a decent approach. Thank you termerins
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