The Tax Type field on the PO Purchase Order Entry form, Info tab in Items section.
Entry in this field is required if entering a tax code.
Specify the tax type for this purchase order item.
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.
Once you specify a Tax Type and Tax Code, the system displays the tax rate in the Tax Rate display field, but does not display the tax amount. However, the tax amount does display on the Purchase Order when printed, and also displays when invoicing the purchase order in AP Transaction Entry.
This field is disabled if there has been activity posted on the PO item - for example if a receipt has already been posted to it.