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Charging use tax on invoices

About setting up accounts for posting payable invoices

Setting up tax districts

Setting up use taxes for payable invoices

Use taxes are taxes that some states levy when you purchase items or services on which no tax was collected by the seller—for example, a tax on out-of-state purchases, or when there is a differential on the sales tax rate you paid and the sales tax rate that is charged in the state.

You specify use tax posting accounts in the 1-8 General Ledger Setup window. When you enter a payable invoice to which use taxes apply, you specify the ‘Use Tax’ District (like the Tax District on receivable invoices), which Sage 100 Contractor uses to calculate and display the total use tax you owe. The posted ledger transaction includes the detail for the use tax.

Before you start

  • Add the use tax Payable, WIP Cost, Direct Cost, O/H Cost, and Equipment Cost accounts you want to use to track use taxes to your chart of accounts, if they do not yet exist.
  • Add the 'UseTax' District you need for the entry.

To set up use taxes for payable invoices:

  1. Open 1-8 General Ledger Setup.
  2. On the Posting Accounts tab, in the Use Tax section, select the following general ledger accounts to which you will post use taxes:
    • Payable
    • WIP Cost
    • Direct Cost
    • O/H Cost
    • Equipment Cost
  3. Click File > Save.