About Posting Taxes on Material Vendor Payments
If you are including taxes on material vendor payments, only the Sales and VAT tax type options are available, as Use tax does not apply to material payments.
If you initialize payments, the VAT tax type will default if the tax code specified for the customer, job, or inventory location is flagged as a VAT code (in HQ Tax Codes).
If you manually enter transactions, the VAT tax type will default automatically when the Default Country for the active company is not ‘US’ (e.g. AU, CA, etc.).
When posting material payments, the GST tax is calculated and debited to the GST tax payable expense account (Debit GL Account in HQ Tax Codes). GST tax amounts will be updated to AP as appropriate; PST does not apply to material payments.