Last updated on MAY 04, 2016
Applies to:PeopleSoft Enterprise FIN Payables - Version 9.1 and later
Information in this document applies to any platform.
Information of Sales/Use Tax and how it works and how it is setup.
Definition of Sales Tax
The Sales Tax is a transaction tax, calculated as a percentage of the sales price. A Sales Tax may legally be imposed on the seller or the purchaser, but in either case, is typically collected by the seller from the purchaser, and remitted to the state. The tax is usually imposed on sales of tangible personal property and selected services. The definition of a taxable sale varies by state.
Definition of UseTax
The Use Tax (in some states referred to as a compensating use tax) is a companion tax to Sales Tax. In general, the Use Tax is imposed on transactions that would have been subject to the sales tax if both the buyer and the seller were located in the same state. It is usually imposed on the use, storage, or consumption of tangible personal property in the state.
The Use Tax often applies when a company makes a purchase from an out-of-state seller that is not required to collect Sales Tax in the purchaser’s state. If the seller does not collect the tax from the purchaser, and the purchase is otherwise taxable, the purchaser is responsible for remitting Use Tax to the state.
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