089 Taxes - Other

Expenses

Fixed

Synopsis

Account 089, Taxes – Other is established to record the monthly provision for taxes and licenses that cannot properly be recorded in any other account. Professional tax and accounting advice should be obtained regarding the proper classification and accounting for other taxes.

Debits

Credits

Monthly provision for taxes and licenses not otherwise provided for in any other account:

a. Personal property taxes

b. Gross Receipts taxes

c. Business Licenses

d. Permits

Example 1

Record the monthly expense of $1,250 for personal property taxes. The $1,250 is distributed to each department as shown in the example below.

Journal: Standard Entries Journal

Entry:		Debit	Credit
Account 089-01	Taxes – Other – New Vehicle Department	$263
Account 089-02	Taxes – Other – Used Vehicle Department	$187
Account 089-03	Taxes – Other – Lease & Rental Department	$63
Account 089-05	Taxes – Other – Mechanical Department	$237
Account 089-06	Taxes – Other – Body Shop Department	$188
Account 089-07	Taxes – Other – Parts & Accessories Department	$200
Account 089-09	Taxes – Other – General & Administrative	$112
Account 270	Prepaid Taxes		$1,250

Distribution of Expenses

	Departmental Distribution
089 Taxes - Other	New Veh.	Used Veh.	Lease & Rental	Mechanical	Body Shop	Parts & Access.	Gen & Admin.
	01	02	03	05	06	07	09
Personal property taxes	Department’s percentage of taxable items	Department’s percentage of taxable items	Department’s percentage of taxable items	Department’s percentage of taxable items	Department’s percentage of taxable items	Department’s percentage of taxable items	Department’s percentage of taxable items
Tags for company owned vehicles other than lease and rental units	Vehicles assigned	Vehicles assigned	Vehicles assigned	Vehicles assigned	Vehicles assigned	Vehicles assigned	Vehicles assigned
Use taxes (not capitalized)	Equipment and supplies usage	Equipment and supplies usage	Equipment and supplies usage	Equipment and supplies usage	Equipment and supplies usage	Equipment and supplies usage	Equipment and supplies usage
General business licenses							Total expense
Specific business licenses	Operation licensed	Operation licensed	Operation licensed	Operation licensed	Operation licensed	Operation licensed
Gross receipt taxes	Year-to-date sales	Year-to-date sales	Year-to-date sales	Year-to-date sales	Year-to-date sales	Year-to-date sales
Taxes on specific signs	Department advertised	Department advertised	Department advertised	Department advertised	Department advertised	Department advertised
Taxes on general signs							Total expense
Certification fees for technicians				Mechanical technicians certified	Mechanical technicians certified
Capital stock and franchise taxes not based on income							Total expense
Salespeople’s licenses	For new vehicle sales	For used vehicle sales	For leases

Comments

Whenever possible, Taxes – Other should be charged to the Department, which incurs the tax. If more than one Department is involved, the expense should be pro-rated based on usage. Please refer to the Expense Distribution table above.

Departmental Distribution