Expert: Arthur Naman - 3/27/2009

Question
When doing accounts payable invoices and you have one that you are taking a purchase discount on do you calculate the sales tax on the discounted total or the original total?

Answer
I have always taken the total on the invoice, including taxes, shipping and handling charges, and then take the discount, usually 2%, off the total.

Accordingly you should not have to calculate sales tax on an accounts payable invoice that you have received.