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Dear community,

 

The product engineering team is investigating various situations and real-life scenarios that happen around tax calculation upon purchase and use of material for projects.

In particular, we would like to hear from you what’s a typical practice today in the following cases:

What does a construction company do, if

  1. They bought material for a specific project, paid use tax for it. After the work was completed, they returned the remainder material to the vendor. Will the construction company claim the respective portion of the use tax from the tax authority?
  2. They bought material for a specific project, paid sales tax to the vendor. After the work was completed, they decided to sell the unused remainder material on the market. Will the construction company claim the respective portion of the sales tax from the tax authority?

Your thoughts and feedback will be greatly appreciated.

Thank you in advance!

 

Hi - please see below regarding your questions, and an added item related to projects and use taxes, which is already on community:

  1. Yes company would want to claim credit for the use tax paid when material is returned
  2. Yes company would want to claim the credit for the sales tax already paid

Use taxes in projects:  When material is purchased to inventory and is exempt for resale, and items are used on projects, need to be able to calculate and accrue the use taxes for those materials based on the tax zone where material is installed, and cost those use taxes the project.  

Ability to accrue use tax on inventory issues to projects | Community (acumatica.com)

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