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Emmakay
Level 2

What account should I use for Sales Tax Vendor Compensation?

My state adopted a temporary Sales Tax Vendor Compensation which is a 2% deduction of the sales tax due. Should I create a new "other income" account for this in order to keep P&L correct and not pay income tax on it? Any help would be appreciated. Thank you!

2 Comments 2
BigRedConsulting
Community Champion

What account should I use for Sales Tax Vendor Compensation?

RE: Should I create a new "other income" account for this in order to keep P&L correct and not pay income tax on it?

 

Well, it is income to you...  Are these rebates sheltered at both the state and federal level?

 

Either way, it probably doesn't matter if you use an income or other income account. They both appear on your P&L, as income.

 

 

Emmakay
Level 2

What account should I use for Sales Tax Vendor Compensation?

Ok. Thank you.

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