If you select the Apply U.S. sales tax and use tax rulescheck box on the Sales taxtab in the Parameters form, any sales tax that is posted in a ledger account that is used for expenditures is recorded.

ImportantFor the U.S. use tax functionality to work properly, an appropriate offset account for the use taxes must be selected in the Use tax payablelookup field in the Ledger posting groups form.

Example of how use tax is recorded

In the Parametersform, select the Apply U.S. sales tax and use tax rulescheck box.

You receive a hotel bill of $1000. The sales tax rate is 10%, and the sales tax is $100.

The $1000 is posted to the vendor account (credit), and the $100 sales tax is posted to the Use tax payableaccount (credit).

On the debit side, both the $1000 and the $100 sales tax are posted as expenses (costs) on the ledger account for hotel expenses. The following table shows how the amounts are posted:

Ledger account	Debit ($)	Credit ($)
Vendor account	–	1000
Use tax payable	–	100
Hotel expenses (cost)	1100	–

Fields that are not available when you select Apply U.S. sales tax and use tax rules

If you select the Apply U.S. sales tax and use tax rulescheck box on the Parametersform, the following fields on other forms are not available:

Pct. exempt from sales taxtext box on the Values form, in which you specify values for sales tax codes.
Sales tax receivablelookup field on the Ledger posting groups form.
Use tax expenselookup field on the Ledger posting groupsform.
Reverse sales tax on cash discounton the Parameters form.
Sales tax on overpayment or underpaymenton the Parameters form.

Example of how use tax is recorded

Fields that are not available when you select Apply U.S. sales tax and use tax rules

See Also