Re: [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 
mailto:gnucash-user@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
    e...@ehbowen.net 
    >
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Re: [GNC] Sales Taxes...

[Eric H. Bowen via gnucash-user]

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 
mailto:gnucash-user@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
e...@ehbowen.net 
>
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Re: [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?


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Re: [GNC] Sales Taxes...

[Les]

I am not an account so..  However, if you are purchasing items for 
resale in Texas, you can obtain a resale certificate from the local 
county, which allows you to purchase these items without paying sales 
taxes.  You do not state the type of organization you are using for your 
business, but it you have formalized it, the certificate is available.


So time ago, I owned vending machines and filed a "d.b.a." in the county 
I lived in at the time and obtained my supplies without paying sales 
taxes. I then included the "retail sales taxes"in my records.


I do not know if this is still available.

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?


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Re: [GNC] Sales Taxes...

[Greg Feneis]

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@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
> e...@ehbowen.net 
> ___
> gnucash-user mailing list
> gnucash-user@gnucash.org
> To update your subscription preferences or to unsubscribe:
> https://lists.gnucash.org/mailman/listinfo/gnucash-user
> If you are using Nabble or Gmane, please see
> https://wiki.gnucash.org/wiki/Mailing_Lists for more information.
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> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.
>
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