Tax Type

Select the tax type for this PO item line.

  • 1-Sales – Tax amounts are payable to the vendor and are added to the purchase order total. This tax amount is directly charged to Job Cost, Equipment, and GL.

  • 2-Use - Tax amounts are accrued, and will be paid at a later date to the appropriate State or Local taxing authority. Calculated tax amounts do not affect the gross or net balance due to the vendor. Instead, the transaction’s gross amount and tax amount is charged to Job Cost, Equipment, and GL account with an offsetting liability account as defined in HQ Tax Codes. Use the AP Tax Report to obtain an itemization of use tax amounts.

  • 3-VAT – (Value Added Tax) This tax is paid on goods and services at each stage of production or distribution, and is based on the value added at each stage. This tax is tracked in the GL and reduces the payment to a taxing authority through an Input Tax Credit (ITC). This tax is not directly expensed. This option is the default for Canadian and Australian companies (Default Country field, HQ Company Setup). Use the AP Value Added Tax Report to obtain an itemization of VAT amounts.

Note: When generating work completed purchase lines from PO Item Distribution, the system posts the tax information to the work completed line based on the work order type, the billable status, and whether the PO item line is for a material or non-material item. For detailed information, see About Tax Calculations for Work Completed.