In the US, in the state I reside, we have to pay a use tax on any purchases from suppliers in a different state (when supplier does not collect sales tax).
Therefore for some purchases, I need to add a liability for the use tax payable. My first idea was to create a tax code and apply this to line items in the purchase invoice. That caused two problems, first the invoice amount does not match the purchase amount and second the tax shows up as a decrease in the tax liability.
My bright idea, was to change the tax to a negative value and then mark the purchase invoice as tax inclusive, adjust the amount to include the tax and then apply the tax code. I thought this would create a negative tax which would adjust the purchase invoice to match the amount I’m paying and also cause an increase in the tax payable liability. However, negative tax seems to calculate as 0.00
My next plan was to add a line item to the purchase invoice for the use tax and record it as a negative amount against the tax payable account, but I’m not able to select liability accounts from the purchase invoice.
Would it be possible to allow for a negative tax rate? or to use liability accounts in the purchase invoice. I realize there are other workarounds, but they create discrepancies in the purchase invoice amount and amount paid and also don’t take advantage of the tax reports. The best I’ve come up with is to add an expense line item to the purchase invoice for the use tax amount and then when spending money, add a line item with a negative value for the tax payable account.
Any other suggestions?