Purchase Tax

Overview

The GoldFinch Sales Tax module enables businesses to calculate Use Tax on purchase orders. Use Tax is typically applied when purchasing goods or services for which sales tax has not been collected by the seller, and it ensures that the proper tax is accounted for.

Setup

To correctly calculate Use Tax, you'll need to configure the following in your GoldFinch system:

• Tax Area: Defines the geographic area where tax rules apply.

• Tax Jurisdiction: Specifies the authority that imposes the tax.

• Tax Details: Provides additional information on tax rates and calculations.

For detailed instructions on setting up these components, refer to:
Tax Area, Tax Jurisdiction, and Tax Details Setup.

Calculating Use Tax on a Purchase Order

GoldFinch calculates Use Tax during the Purchase Order process based on the following factors:

1. Tax Area and Tax Liable:

   • When a Purchase Order is created, the Tax Area and Tax Liable fields from the Buy-from Vendor Account are copied to the Purchase Order.

2. Tax Group for Items:

   • The Tax Group associated with each item on the Sales Line is copied to the corresponding Purchase Line on the Purchase Order.

3. Tax Calculation:

   • Upon saving the Purchase Order, GoldFinch calculates Use Tax based on the combination of:

     • Tax Area

     • Tax Group

     • Tax Liable flag

This automated calculation ensures that the correct Use Tax is applied, reducing manual work and ensuring compliance with tax regulations.