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Don’t Understand Purchase Tax

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Posted on by MickieParis

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Reading "Tax Computation in Payables Management in Microsoft Dynamics GP" and I don’t understand it.
First off, who’s paying the tax? My company or the vendor? It doesn’t say.
Second, from my understanding there is no such thing as a “purchase” tax. If I purchase something I either pay the tax or I have a resellers certificate which I’m sales tax exempt. If I pay the tax because I’m using the item, then the full cost including the tax is my expense. So where is a purchase tax involved? Please help me understand. Thanks.

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MickieParis 620 on at

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RE: Don’t Understand Purchase Tax

Ok, then the Purchase tax is really used to track Use Tax. Thanks Richard!
Richard Wheeler 75,730 on at

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RE: Don’t Understand Purchase Tax

If you roll the tax amount into the purchases amount then you do not need the purchases tax. However, if you want to accumulate the "use" tax separately then you would use the purchasing tax. Check with your accounting department as to how they want tax handled. You may have a situation where you consumed something you received from a distributor that you had intended to sell but used internally. In this case, you need to pay the tax directly.

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