identifying sales tax

[Maf. King]

On Thursday 12 May 2005 20:09, Rod Engelsman wrote:
>
> For our overseas friends a bit of clarification:
>

Thanks Rod.  That helps my understanding of bri's (the OP) circumstances.

>
> So the IRS (Federal level) actually allows you to deduct taxes (sales)
> that have been paid to the state. They also allow deductions for local
> property taxes.
>

Therefore, bri needs to be able to get a number out of GC at year end, which 
reflects that deductible total.  Now, if everything purchased is at the same 
rate, then sure, just record the total of every expense without splits and 
take 8.25% (or whatever) of that year-end total for use on the tax form.

If, however, various things have different rates of tax on them, then IMHO, a 
split to a Tax:localSalesTax account (hmm expense or asset? I'll leave that 
to someone Who Is An Accountant!) for each item purchased is the easiest way 
to get that number at the year end.

> You may bitch about your VAT or GST or whatever, but our "system" is
> infinitely more complicated. In fact our tax system is similar to our
> health system in that the defining characteristic is the lack of any
> real "system".
>

My only bitch about VAT (in a day-to-day sense for my business) is that it can 
be hard to keep track of what gets what rate of tax applied. EG neither 
biscuits (US:Cookies) nor chocolate attract VAT, but biscuits covered in 
chocolate do.... (IIRC - things change!)


> Rod

Have a good weekend,
Maf.