[GNC] Sales Taxes...

[Eric H. Bowen]

See, they /shouldn't /be (accounted separately), but in case 2 (taxes 
paid separately to state at end of quarter) and case 3 (entered as a 
vendor bill) there doesn't appear to be a simple way to redirect the 
taxes to the cost of supplies. Unless I'm missing it. Suggestions?----Eric.

On 12/27/2020 6:45 AM, Greg Feneis wrote:
> All of these examples appear to be supplies for the business to use 
> (vs items purchased for selling). Why would the cost of the taxes paid 
> need to be account for separately from the cost of the items?
>
> Kind regards, Greg Feneis
> (Pixel 3)
>
> On Sat, Dec 26, 2020, 16:52 Eric H. Bowen via gnucash-user 
> <gnucash-user at gnucash.org <mailto:gnucash-user at gnucash.org>> 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?
>
>     -- 
>
>     --------Eric H. Bowen
>     eric at ehbowen.net <mailto:eric at ehbowen.net>
>     <mailto:eric at ehbowen.net <mailto:eric at ehbowen.net>>
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