Sales tax item preference for Accounts Payable

Default sales tax item

The Default Sales Tax Item is used to track sales tax separately from the purchase cost, while ensuring that the tax amount is not posted to Sales Tax Payable. It is intentionally directed to the cost of goods (COGS) General Ledger account in your accounting application. This approach is useful when sales tax is treated as part of the expense rather than a liability, allowing for more accurate cost tracking in specific accounting workflows.