[GNC] Sales Taxes...

[Les]

Additional thoughts:  If you are paying sales taxes on items for resale 
(assuming you cannot purchase without sales taxes) then the sales taxes 
become part of cost of goods sold.

Les

On 12/26/20 6:49 PM, Eric H. Bowen via gnucash-user wrote:
> Okay. With year-end coming up I'm not looking to make major changes in
> the past, but I'd like to account for everything properly in the future.
>
> Say I purchase $100 in printing supplies (paper, ink, etc.) from a local
> vendor. The IRS wants me to account for taxes in the value of items
> purchased. So I add an entry for $108.25 (8.25% local tax), and the full
> value goes into my "Expenses:Business Expenses:Office Supplies" account.
> Fine.
>
> Now, suppose I purchase that $100 in supplies from an out-of-state
> vendor who falls under the threshold for reporting sales taxes to Texas
> (rhyming couplet there?) and so does not charge me sales tax on the
> purchase. The law says that I have to pay a sales/use tax on the
> purchase anyhow. Fine, I have a liability account set up for "Sales
> Taxes Payable" which I normally use for the sales I make to customers;
> once a quarter I total this up and send a check in to the comptroller.
> No problem at all to do so with my online purchase, but the $8.25 which
> I pay at the end of the quarter doesn't get added to my Office Supplies
> purchase, as it should.
>
> Finally, suppose I purchase the supplies from a local vendor, who
> charges tax, but who grants me a "Net 30" for payment and so it goes
> into my Accounts Payable as a bill. If I use the "Sales Tax Payable"
> account/tax table for the purchase, my payment for the purchase goes in
> as a payment on the liability, which is wrong. I can use a separate
> sales tax table tied to a different account for purchases, in which case
> it will be recorded as "Expenses:Business Expenses:Business Taxes:Sales
> Tax Paid", but ideally the $8.25 should have been added to the value of
> the purchase in "Office Supplies."
>
> Is there a quick and elegant solution to this issue which I'm
> overlooking, but that I could implement for next year?
>