• Use Taxes in Xero

    | Categories: Sales Tax

    Use Taxes are often reverse Sales Tax that businesses self-assess. This is common in US States and Canadian Provinces with PST (BC, SK & MB) which require businesses to self-assess Use Tax on out-of-state/province purchases. Xero goes a great job of managing Sales Tax we charge on our invoices, and even on Input Tax Credits for countries with a GST/VAT style tax. However, managing Use Taxes are a little more tricky.
    Xero will not calculate the Use Tax for you, but it can help you accumulate the raw data. The trick is to be able to flag the eligible transactions. The trick here is to create a Tax Code with a 0% rate, and then to apply this all eligible transactions. If you have more than one form of Use Tax then you should set up more than one code.