[GNC] Delayed Direct Payment of Sales Tax from Vendor Bill?

[Eric H. Bowen]

Okay, folks, I'm lost.

I normally use cash accounting, not accrual. But I recently purchased a
software package from a vendor who offered "Net 30" terms and wanted a
purchase order. I hadn't really used the billing function before and
since I'm paying before the end of the month I set up the vendor, used
the "Bill" function and added some verbiage in the notes making it into
a purchase order, and the vendor accepted it and sold me the product. So
far so good.

The fun part came when I tried to post it. The software package is
taxable in my home state, but the vendor did not invoice sales tax.
Responsible (cowardly!) citizen that I am, I tried to split it out as a
line item. I've done that before on other (checking, credit card)
purchases...enter a split item noting the sales tax amount and
accumulating it in a "Sales Tax Payable" account until quarterly filing
time comes and I pay all the taxes due to the state at once.

In the bill, I marked the software package as taxable. It computed the
proper amount of tax, but the vendor's invoice was for the purchase
price only. I enter a payment for the invoice amount, and I'm prompted
to pay the tax balance. Understandable, but it won't let me split the
tax out to another payee or account. And, at the same time, it posts the
tax amount as a credit (negative balance) to my "Sales Tax Payable"
liability account. If I was paying taxes with the invoice, it would
throw off my actual tax liability at the end of the quarter.

How best to make this work properly?

-- 

--------Eric H. Bowen
eric at ehbowen.net <mailto:eric at ehbowen.net>
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