Milestone Billing and Sales Tax Timing

Summary:

Our client provides integrated technology solutions for clean energy and critical power infrastructure. Their customer invoices are generated based on Milestone Billing, initiated through the PPM (Project Billing) module.

However, for U.S. sales tax purposes, the taxable sale of tangible personal property generally occurs when the goods are delivered or shipped to the customer. Milestone billing represents a revenue/billing schedule and is not necessarily the legal event that creates the taxable sale.

The client therefore requires sales tax to be reported in the period in which the material is delivered/shipped, even when the related milestone invoice is generated later or covers multiple prior shipments.