This is a two-part question/request for guidance. I need to set up AR so construction billing will retain tax on the retainage. I understand we need to specify the retainage tax payable account/subaccount in TX205000. We use Avalara for tax calculations. I have not found any documentation to help guide me through this process or show me the accounting flow of this. Can I assume the retained tax account would be a liability account? I have a test tenant, but do not have an Avalara sandbox so testing is useless at this point. Thanks.
Question
Configuration of taxes for AR Retainage
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