When a US company buys somethign, do they ever record the sales tax?

General Discussion
1

I just need to confirm something for some software I am finishing and I know there are a few Americans here :smile:

In the US when a company buys something for the office, lets say a chair for $100, it also has sales tax of 10% giving a total of $110.

Am I right in thinking that the Sales TAX amount is never entered into the books as a separate value and that the whole chair is just considered to cost $110.

Any help would be appreciated.

2

read this it may answer your question, but that said it appears it can vary on US state

3

@jimr1 thanks for the link. I have read all of that sort stuff I can find online, I am just after someone who has run a US company and can tell me, this is 100% what we do.

4

Sales tax is usually just part of the item’s cost, so the chair is booked at $110, not $100 + $10 recoverable tax.

5

Just had a scoot around the internet, and if you are producing accounting software that is for the global market take a leaf out of Sage’s book and produce a version for each country as there is no one size fits all. Sage seem to use a programming team in Atlanta to produce the relevant version which I would guess use US accountants and help from the IRS to achieve their goal. It would appear the US is a tough nut to crack (accounting wise), so if you are producing accounting software reach out to some US accounting guru’s who will have all the answers for you. If your not producing accounting software, I would guess the question is a bit moot

1 Like
6

Supported systems

  • No Tax
  • Sales Tax (Cash Basis)
  • VAT Standard Accounting (UK).
  • VAT Cash Accounting (UK)
  • VAT Flat Rate (Basic turnover) (UK)
  • VAT Flat Rate (Cash based turnover) (UK)

I just need to know how an entry is added and viewed to clarify. :smiley:

7

as an (ex) tax accountant in the UK. I can only agree.

US tax is very complicated (UK tax is bad enough due to VAT and Company/Charity/Partnership/Self Employed/Personal/Employer/Employee/NI/CGT/IT)

the US only confuses even more with different terminology, different allowances.

8

sales nexus, USE tax, sales tax (state, precept) yep

9

ideally I just need a picture of a log entry for an expense from a us company. it can be made up.

10

I no longer have a company. But…

Have you checked Gnucash?

It allows for ‘split transactions’. You enter both amounts in a single transaction. Then you let the tax folks figure it out. :wink:
image

11

@ID10T no, but that could be useful as it is a US software. thanks