We just changed accounting systems, and prior we held retainage on sales tax as it was a line item within our financial schedule. In the software change, the sales tax is more integrated and calculates the correct amounts, etc. The new system is NOT set to withhold retention on sales tax. We submitted an invoice to a GC and they are responding and requiring that retention be held on the sales tax. The project is in PA. Any thoughts? Sales Tax is a pass through cost, so the GC withholding retainage on it, means that as the subcontractor, we are funding a % of their sales tax burden until the end of the job. Which, is frustrating!