Use Tax on Purchase Invoices

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For some purchases I need to record Use Tax but I need to have the expense recorded to a different account than the item being purchased.

Here is what I have in Tax Jurisdiction:

Code	Description	Tax Account (Sales)	Tax Account (Purchases)	Reverse Charge (Purchases)	Report-to Jurisdiction	Country/Region
TN-STATE	Tennesse State Sales Tax	4663	5351	2301	TN-STATE	US

And this is what is in Tax Details:

Tax Jurisdiction Code	Tax Group Code	Tax Type	Effective Date	Tax Below Maximum	Maximum Amount/Qty.	Tax Above Maximum	Expense / Capitalize
TN-STATE	TAXABLEUSE	Use Tax Only	1/1/2005	9.75	0	0	No

For a $100 transaction with Jurisdiction=TN-State and Tax Group Code=TaxableUse

The actual posted G/L Entries are:
$100 Accounts Payable
$109.75 Expense account
$9.75 Tax Payable Accrual account (2301)

However I need to have the G/L Entries look like this:

$100 Accounts Payable
$100.00 Expense account
$9.75 Tax Expense Account (5351)
$9.75 Tax Payable Accrual account (2301)

Is there a way to make this happen?

Thank you,

Sandra

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Community Member on at

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Anyone?

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Rabin 2,976 on at

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Hello Sandra,

Yes this one is the most common issue while dealing with multiple accounts while posting.

Just refer to the image below:

Here the Transaction is : Buying an Item at $10 before VAT.

VAT is 17.5%

Here you can clearly see how different Amounts are being handled by different posting setups.

Here your case is similar to VAT Setup. If you want to stick with the standard NAV then you will have to adjust your posting with this posting pattern.

Conclusion: You need to setup the respective posting setup and use the posting group value in the respective resource card(Iteem, Vendor, Customer etc) in order to get the value posted to the intended G/L Account...

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Rabin 2,976 on at

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If you want to post new value(out side of Standard values) to some new Account then you can always customize NAV system...

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Community Member on at

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Hi Rabindra,

We used VAT setup in Nav 2.5, primarily because we didn't buy the Sales tax granule with our original setup. Eventually we purchased Sales Tax but by then we had most of this covered with VAT setup. A week or so ago it dawned on me that this would be a method of getting Use tax to post correctly for us. Thank you for confirming this for me.

Sandra

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Community Member on at

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I considered that as another possibility however we are trying to limit customizations as much as possible. Right now I'm waiting to see if our corporate CPAs are going to accept the current tax posting setup.

Thanks,

Sandra

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Rabin 2,976 on at

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Hi Sandra,

I agree with you. You should try to adjust the process while keeping the standard features intact. Customization will bring other challenges as well.

Good luck with your Implementations....

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Sai Ragavan 51 on at

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Hi Sandra,

The only step you are missing is that the 'Expense/Capitalize' flag at the Tax Details needs to be checked.

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