# How to code a payable invoice with taxable and non-taxable lines in Sage 100 Contractor In Sage 100 Contractor, set the sales tax or use tax rate on each line of the payable invoice. Use the sales tax code where the seller charged tax and a non-taxable code where they did not. Accrue use tax where it applies. A mixed bill has some lines where the seller charged sales tax and some where they did not. Each line needs the right tax code. Where a seller did not charge tax on something taxable in your state, you may owe use tax yourself. ## Before you start - Sage 100 Contractor Accounts Payable - Tax districts and use tax accounts set up ## The Sage 100 Contractor way Where to find it: 4-2 Payable Invoices/Credits 1. Open 4-2 Payable Invoices/Credits and enter the vendor invoice. If it is for a purchase order, enter the PO number in the Order# box. 2. Sales tax from the PO defaults into the invoice and shows in the grid. If you change Quantity or Price the sales tax recalculates. 3. The whole PO is taxable or not taxable. A single line cannot be flagged on its own. To change this clear Use PO Sales Tax on the Options menu and enter the sales tax yourself. 4. If the vendor did not charge tax, set the vendor Use Tax Rate on the Invoice Details tab of 4-4 Vendors (Accounts Payable). 5. On the invoice click the Use Tax button, or choose the Use Tax District. The program works out the use tax you owe and you can change the amount. 6. Save the invoice. The posted ledger transaction includes the use tax detail. ## Limits in Sage 100 Contractor - Each PO line is not independently taxable or non-taxable. One designation covers the whole PO. - If you overwrite the imported sales tax amount the program no longer recalculates it when you change Quantity or Price. - You must click the Use Tax button yourself. The use tax rate is not applied automatically. ## Good to know in Sage 100 Contractor - A tax district can hold up to five tax entities and marks which cost types are taxable (Material, Labor, Equipment, Other, Subcontract). Districts are set up from 3-6 Receivable Clients. - Post use tax expense to chosen accounts with the Post use tax expense to option in 1-8 General Ledger Setup, Posting Accounts tab. ## The Pulsify way 1. Forward the supplier's invoice to your Pulsify address or upload it. Pulsify reads every line and finds the vendor in Sage 100 Contractor. 2. Pulsify sets a tax code on each line from the tax rate printed on that line, matched to a tax code in Sage 100 Contractor. 3. Check any line where the invoice is unclear. Change the sales tax or use tax rate and approve. 4. The payable invoice is created in Sage 100 Contractor with the tax code on each line. Pulsify connects to Sage 100 Contractor. We set up the connection for you. What Pulsify does not do here: - Pulsify does not work out use tax. If a seller did not charge tax on a taxable item, accrue use tax in Sage 100 Contractor yourself. - A tax rate on the invoice that has no matching tax code in Sage 100 Contractor is flagged. Add or choose the code before you approve. ## Example in Sage 100 Contractor Example Steel and Rebar Co is based out of state and charges no sales tax. The invoice has a material line and a delivery line. The use tax district taxes Material only and the rate is 6%. Amounts are in USD. - Rebar for slab pour: $2,000.00 (Use tax district, Material taxable, use tax $120.00) - Delivery to job: $150.00 (Use tax district, Other not taxable, use tax $0.00) Invoice total payable to the vendor $2,150.00. Use tax owed $120.00, posted to your use tax accounts from 1-8 General Ledger Setup. ## Common mistakes - Forgetting to click the Use Tax button, so no use tax is calculated on the invoice. - Overwriting the imported sales tax and then changing the price, so the tax no longer updates. ## Common questions ### Can I mark one line of a payable invoice as non-taxable in Sage 100 Contractor? Not on a PO-based invoice. Sage 100 Contractor treats the whole PO as taxable or not and imports its sales tax to the invoice. You can clear Use PO Sales Tax and enter the sales tax yourself. ### How do I accrue use tax on a vendor invoice? Set the vendor Use Tax Rate on the Invoice Details tab of 4-4 Vendors. On the invoice click the Use Tax button or pick the Use Tax District. The program works out the amount and you can edit it. ### Where do use tax postings go? Choose accounts in 1-8 General Ledger Setup on the Posting Accounts tab under Use Tax. If you do not use the Post use tax expense to option the expense posts to the accounts used on the invoice. ## Sources - https://help-sage100contractor.na.sage.com/Sage100Contractor/US/25_1/Content/Modules/4-Accounts_Payable/Entering_payable_invoices.htm - https://help-sage100contractor.na.sage.com/Sage100Contractor/US/25_1/Content/Modules/4-Accounts_Payable/Using_the_purchase_order_sales_tax.htm - https://help-sage100contractor.na.sage.com/Sage100Contractor/US/25_1/Content/Modules/4-Accounts_Payable/About_vendor_invoice_defaults.htm - https://help-sage100contractor.na.sage.com/Sage100Contractor/US/25_1/Content/Modules/4-Accounts_Payable/Charging_use_tax_on_invoices.htm - https://help-sage100contractor.na.sage.com/Sage100Contractor/US/25_1/Content/Modules/3-Accounts_Receivable/Setting_up_tax_districts.htm Source: https://www.pulsify.tech/how-to/code-a-bill-with-taxable-and-non-taxable-lines-in-sage-100-contractor/ (last checked 2026-10-19)