Is sales tax a part of accounts payable
?
submitted by Art Weingartner

Tilly

Usually, sales tax isn't included in accounts payable. It's more like a separate liability because you collect it from customers and then pay it to the government. So, it's not part of what you owe to suppliers.

idsaynot

Sales tax isn't part of accounts payable. If your business sells something and charges $100 plus $10 sales tax, you keep the $10 until you pay it to the government. That $10 is recorded as sales tax payable, not accounts payable.

Robby

No, you put that in sales tax payable.

Accounts payable is more for suppliers and other people you buy things from. That's a distinct account because you get something from it. If you pay a supplier $1,000, you're going to get $1,000 worth of materials or inventory. Sales tax, on the other hand, isn't going to bring in inventory that needs to be accounted for. You just pay it, and then it's gone.

Phred

Sales tax collected from customers is a liability called "Sales Tax Payable."

It's a separate account because it's not an obligation to suppliers, but a liability owed to your favorite tax authorities. Accounts payable tracks what you owe to suppliers.

Lonny

I think sales tax isn't part of accounts payable because it's money you collect from customers, not money you owe to suppliers. You keep it in a separate account until you send it to the government.

Raymond

No, sales tax payable is classified separately from accounts payable. It is a liability, because you need to pay that out to the gov. Accounts payable is for purchasing goods or services.