[GNC] Sales Taxes...

[Les]

I suggest you involve your accountant on this subject.

On 12/27/20 9:41 AM, Eric H. Bowen via gnucash-user wrote:
> 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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