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Track the amount of sales tax actually paid on each expense
It would be very helpful if Expensify could track the total amount of sales tax actually paid on each expense and report total for each category.
My company is a small manufacturer. We typically ship fewer than 10 units per month. Because of this, we often end up buying inventory with a credit card through online retailers as our volumes are too low to buy many parts wholesale. We are not subject to sales tax on parts that are included as components in our finished units and resold to customers. We try to get tax exemption certificates on file with our vendors, but in some cases they do not accept them, or if we have to switch to a new vendor due to stocking issues, we may not have time to get the tax exemption set up. In these cases, we submit a refund claim to the state to get the sales tax we paid refunded. Right now this is a very manual process of looking through all receipts in the tax exempt categories at the end of the month and totaling up those which charged us tax.
Additionally, if the states ever start cracking down on use tax, almost everyone will need a feature like this in order to correctly pay use tax on online transactions where the vendor didn't charge it (or charged the wrong amount). Technically if you buy anything where the vendor doesn't charge the proper amount of tax, you have to pay the difference as use tax. Most companies don't bother with this because it's so difficult to track. If we had a function that broke it out for every receipt with a total for each category, it would be easy to calculate the amount owed and make a payment if necessary.
Comments
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Hi @cgwright Welcome to the Expensify Community!
Have you tried out our Tax Tracking feature? This allows you to apply a tax rate to each expense, and you can also set a default tax rate per category.
Users can use Expense Rules to apply tax to all new expenses with a certain keyword in the Merchant name:
We don't read the tax total from the receipt, i.e. it's not a SmartScanned element, but instead use the tax rate and the receipt total to calculate the tax component.
Does that accomplish what you are trying to achieve?
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Thanks for the information. I had a long chat with support about this and then sent me here to post the idea.
Unfortunately just setting a default tax rate for a category doesn't help as we're specifically looking for exceptions (cases we were charged tax where we shouldn't have been) so that we can periodically request sales tax refunds from the state. Given this, we really need the amount of tax smartscanned off each receipt to save a lot of manual review.
As a work around right now, we'll be having users manually tag receipts where sales tax was charged to flag them for review. This will at least save some amount of manual review after reports are submitted.
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Great, thanks for clarifying there @cgwright! Don't forget to vote for your own Idea on the yellow banner!
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Done!
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I was looking for an alternative software to Neat and was hopeful but given this idea I guess not. I only use Neat to extract sales tax from my receipts to use in my IRS sales tax deduction. Unfortuantely over the years they have gone to the cloud and created a heavy price tag for that storage. I was hopeful this would fit the bill, but guess I have to keep looking for my alternative.
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Hi @Shaymomx6 You could create a Custom CSV export showing the sales tax. You could split the expense into the purchase price and sales tax. If you have any other questions, feel free to reach out to [email protected]
