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

[Adrien Monteleone]

It would probably be easier to treat this as a separate ‘use tax’ type transaction where you recognize the liability independent of the invoice. (some jurisdictions impose a tax on items used in business that otherwise wasn’t charged sales tax for some reason)

So a separate transaction like:

Dr. Expenses:Taxes:Sales
  Cr. Liabilities:Sales Tax Payable

This lets you pay the vendor bill as-is in full and still track and pay the sales tax liability separately. (with the rest of your accumulated sales tax liability)

Alternatively, if you don’t want to unpost and re-edit the bill and keep the tax on it, then you can ‘pay’ the remainder of the bill with the Sales Tax Payable account. (you can pay a liability with a liability)

Thus you can pay the bill partially (but fully as actually invoiced from the vendor) and transfer the remaining tax amount from the special AP account to Sales Tax Payable.

Note, this would be two separate payments, one from cash/check/card/other for the vendor’s portion, and a second ‘payment’ from Sales Tax Payable.

Note, the tax on the bill (as part of the bill) should post to an expense account, not a liability account. It could be an accrued expense account that you then shift later as needed, however.

Regards,
Adrien

> On Apr 15, 2020 w16d106, at 1:10 PM, Eric H. Bowen via gnucash-user <gnucash-user at gnucash.org> wrote:
> 
> 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?