Use tax for Sales orders

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Posted on by Veronika Filonenko

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Hi,

I just found out that the 'use tax' functionality on the sales tax group form is only designed for purchase orders. I wonder why and how can I leverage the same need from the customer perspective?

The need is the following:

Customer buys a tech item. He must pay the regular taxes, plus some ECO taxes. For some customers, we (the organization) decide to assume the eco tax amount, but we still will remit it to the government. I expected from this functionality to debit the margin of my item and the credit to the payable account.

Now my tests came to this:

SO: debit goes to the customer receivables

credit to GL of choice

PO: debit goes to GL of choice

credit goes to GL of choice

Is there a way to make this behave at list such as it is designed to behave on the purchasing side??

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Veronika Filonenko 1,255 on at

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RE: Use tax for Sales orders

This is actually a potential workaround.

The only downside I see is how this workaround going to affect the customer invoice. We will definitely see 2 ECO tax charges. Sometimes customers are picky.

But I think this might still work.

thanks for the idea!
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Ludwig Reinhard Microsoft Employee on at

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RE: Use tax for Sales orders

Hi Veronika,

I see. If I get this right then you basically want to debit and credit a sales tax account for the $0.10 tax, right?

Rather than setting up a single ECO_FREE sales tax code, have you tried setting up a second ECO_FREE2 code with a negative 0.10 percentage that is always posted together with the ECO_FREE sales tax code?

In other words, can you try setting up two sales tax codes, one with a positive and one with a negative %?

Would that be a feasible workaround?

Best regards,

Ludwig
Veronika Filonenko 1,255 on at

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RE: Use tax for Sales orders

Hello Ludwig,

here is the actual behavior and set up. Which is pretty easy.

I do expect 14.98$ of tax to be added to my customer invoice.

0.10$ I want it to be added to a payable tax GL account as a credit and a debit to my Finished good inventory account OR any other GL.

The result is this one:

My total invoice to the customer should be 129.98$ but we see that the 0.10$ are being added to the total.

And here is the example i tested to a PO which works fine. at list it does not get posted to the invoice.
Ludwig Reinhard Microsoft Employee on at

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RE: Use tax for Sales orders

Hi Veronika,

To get the question and the accounting right, do you want to create a posting as follows:

DR: Customer (AR)

CR: Revenue (P&L account)

DR: Tax account

CR: Offset Tax account

Is this the voucher you want to create?

If so, can you add some numbers to that voucher to see how you want to have the gross/net and tax amounts posted?

Best regards,

Ludwig