About Allocating Use Taxes

If your company incurs 'use tax,' you need to consider whether to allocate use tax expenses to fixed, specified posting accounts, or to allocate use tax expenses proportionately to the accounts used in payable transactions in the 4-2 Payable Invoices/Credits and the 4-7-3 Credit Card Receipts windows.

You use the Posting Accounts tab in the 1-8 General Ledger Setup window to indicate your choice:

• To use specific use tax expense posting accounts, you must select the Post 'use tax' expense to checkbox in the 1-8 General Ledger Setup window, and then specify the accounts.

  Sage 100 Contractor then allocates use tax expenses to these accounts in the 4-2 Payable Invoices/Credits and the 4-7-3 Credit Card Receipts windows.

  If you plan to post use tax to specific use tax accounts, you may need to set up the accounts to which you will post use tax payable and the associated WIP, direct, equipment, and overhead expenses.

  Note: Use tax expense accounts cannot have subaccounts or departments.

• If you do not select the Post 'use tax' expense to option in the 1-8 General Ledger Setup window, when posting payable transactions that include use tax, you need only to specify the Use Tax Payable Account and for inventory-related use taxes, an overhead expense account.

  Then, the use tax amount is allocated proportionately based on the accounts and subaccounts used on the invoice.

In the 4-2 Payable Invoices/Credits and the 4-7-3 Credit Card Receipts windows, Sage 100 Contractor applies any sales tax limit specified for the tax entity (the limit being based on the invoice total).