Direct Pay Sales Tax is used to pay the taxing authority directly.

To set the Direct Pay Sales tax feature in Pak Accounting:

1. Turn on the feature in Company Maintenance > Accounts Payable> A/P Entry 2 screen. Selecting Yes will allow the invoice to be coded to one tax authority. Selecting Line Item will allow each coding line to be coded to a different tax authority.
   
2. In the Accounts Payable > Master File Maintenance > Tax Rate, define each taxing authority and its corresponding tax rate. See the Help for Invoicing > Tax Rates for more information on setting up this screen.
   
3. In General Ledger > Master Files Maintenance > Company Options > Accounts Tab, define your Sales Tax Payable Account (after setting it up in [F11]). The Taxing Authority normally subbed out the Sales Tax Payable account for easy reference.
   
4. When entering the A/P Invoice, the user will need to fill in the Sales Tax Accrual box under the Tax/Discount tab (if the setup was for a tax authority, "Yes" was selected).
   
5. If the company option is set to Line Item level, a new field will be available on the G/L Coding grid where the tax authority is coded on a line-by-line level:
   

Journal entry that is created. Acct 2390 is credited for the sales tax payable, and it is subbed out by the taxing authority so you will know exactly how much tax is owed by each individual taxing entity: