Accounting For Sales Tax And Job Costing

bobarnett

I understand that when some contractors purchase materials from suppliers the sales tax is included on the invoices. That makes it very easy to include the sales tax as part of the cost of the job. In our situation, however, we also have a small retail store and so we are set up as a resale account with our suppliers and we are not charged sales tax on the purchases we make but still owe the tax when the items are billed to the customer which we report and pay to the Tax Board. This makes it a rather puzzling situation for me because I'm not sure how to get the sales tax amount on to the job to account for what we pay to the Tax Board for the materials we use on a contract. Any help would be appreciated.

threaderman

I pay sales tax, use tax,and any consumed inventory taxes monthly,electronically.There are different procedures depending on how you invoice.If you bid a job,usually all costs are in the bid and in that case you have your material sheet and pay taxes from that.
If you mark-up and resell and itemize on an invoice than you must pay the tax that is required for the higher selling price.Make sense?I invoice both ways,it depends on the job.

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Joe ---International Code Council Member

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