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Tracking sales tax for purchase orders (POs)

You can enter sales tax on a purchase order, but the amount is considered to be part of the total expense (as opposed to what you owe the government for sales tax you've collected from a customer). Simply include the sales tax as part of the cost of the purchase and include it in the same expense account. For example, you purchase office supplies for $15 and the sales tax charged is $.85. The total amount of $15.85 is charged to your office supplies expense account.

For inventory item purchases, you may want to associate expenses like sales tax or freight charges with your cost of goods sold accounts (COGS) instead of with an expense account.

See also

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