Aptora | All-In-One Field Service Management

Sales Tax

Track Sales Tax Paid for Materials and Deduct That Amount When Remitting Tax Collected

How to Handle Point of Sales Use Tax and Sales Tax

Question: How can we track sales tax paid on resale items at point of purchase and reduce the amount of sales tax we remit to our sales tax authority?

Scenario: You pay sales tax when you buy items for resale and you are allowed to reduce the amount of sales tax you eventually pay by the amount already paid. You collect the full amount of sales tax from your customers.

Answer: When you enter a transaction (like a Bill) for resale items, use the Expenses tab to select (or create) a COGS type COA that is only used to track sales tax expenses on resale items. Maybe call it “Sales Tax Point of Purchase”. Enter the amount of sales tax paid.

When you go to pay your sales tax, determine how much tax you have paid up to that point. Click the Adjust button. Select the same account used above. Select the “Reduce Sales Tax By” option. Enter the amount as a positive number. Click Save.

The Sales Tax Point of Purchase account will be a Cost of Goods Sold for the sales tax you are paying at point of purchase. When you remit sales tax collected, the sales tax adjustment amount will reduce that COGS.

Related Topics

Sales Tax and Use Tax FAQ

Scroll to Top

Request a Personalized Demo

Fill out the form below, and we will be in touch shortly.
Demo Form 121422

What number is equal to 7 plus 4?

By entering your information above and clicking the “Agree and Get Started” button, you agree to our Terms of Use and Privacy Policy that we may contact you, by SMS, at the phone number and email address you provide in this form in accordance with our Terms of Use. Promotion Terms & Conditions apply.

/* */