Katie wrote:
- quote -

Thank you.

And thanks to all who responded. I can only get this group
in read-only state in my newsreader, have to come here to
Google to reply ... and I forgot to tell my newsreader to
synchronize this group until today ... so I just saw your
answers.

(I should have mentioned that the person having the problem
said they were on a cash basis ... though they didn't
specify if that was just for their accounting, or for their
sales tax payments. I guessed the person thought their
sales tax payments were on a cash basis.)

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John Pollard wrote:

- quote -

It depends on the state and the arrangement between the
buyer and seller.

Generally, the sales tax is due at the time of the sale.
However, if there is an arrangement for payment in
installments, some states will defer payment of the sales
tax until each payment is received. If it is just a matter
of late payment by the buyer, the tax is generally due at
the time of sale. If the buyer never pays and the debt
becomes uncollectible, most states will allow a deduction
from taxable sales for the bad debt in the period when it is
written off for book purposes.

No state, AFAIK, will postpone collection of the sales tax
until the last payment is received.

Katie in San Diego

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John Pollard wrote:

- quote -

All good answers should include : "it depends."

Actually though, it depends on what basis the seller is set
up with the state sales tax agency, i.e. whether on cash
basis or installment basis. If the former, all sales tax
is due for the month of sale. If the latter, then sales tax
is remitted on a pro rata basis.

ChEAr$,
Harlan Lunsford, EA n LA
Wed Aug 9 2006

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"John Pollard" <j_pollard[at]mchsi.com> wrote

- quote -

It's generally based on how the seller filled out their
sales tax application. At that time they told the state
that they would account for and remit the taxes based on
either "Cash" or "Accrual". If "accrual" was chosen, the
tax is due when the sale is made (not when it's collected).
If "cash" was chosen, the tax is due as the money is
collected from the buyer.

For cash flow purposes, it's not fun to have a $10,000 sale
in July that you don't get paid for till September, but you
will owe $700 of taxes in August.

--
Paul Thomas, CPA
paulthomascpapc[at]bellsouth.net

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John Pollard wrote:

- quote -

I'm sure the answer depends on which state you are talking
about, but I would say that the sales or use tax is due as
soon as the goods are shipped to the buyer. Your payment
arrangements with the buyer are irrelevant.

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If a seller invoices a buyer and sales tax is included, and
the buyer pays the invoice in several payments over time; at
what point is sales tax owed by the seller to the
government? Is it prorated according to the amounts of the
individual buyer payments? Is it owned as soon as the first
payment is received? Or only after the full amount of the
invoice is received?

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