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Varying Provincial sales tax regimes

#1 User is offline   GORANDMARSASK Icon

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Posted 07 July 2010 - 02:03 AM

I have talked to Intuit support twice on this but am wondering how others handle this.

In the environment setup one establishes pricing for returns and indicates what the HST/GST rate is and the PST. This sets the default 'taxes' to be charged on invoices.

But whathappens if clients live in different provinces. As I heard at a CRA seminar on the HST coming to Ontario and BC, it is the residence of te customer that determines which provincial sales tax regime applies.

For example I now live in Saskatchewan where income tax preparation is a 'taxable service'. Therefore I must charge Saskatchewan clients the 5% PST. I must charge my Ontario clients 13%. I must charge BC clients 12%. I must charge Alta clients 5%. In the case of Quebec even though they have a QST I am not obliged to charge Quebec clients as Quebec is not a HST province and clients there are supposed to self-assess the QST (I suspect few do).

Profile asks on the Information athe province of residence as of December 31. It also asks for current address (including province). But the default 'sales tax' percentages don't change as a result.

I hope the programmers at Intuit find a way to allow us to have proper provincial sales tax arrangement flow out of designating province of residence or current address rather than us having to manually override the default sales tax amounts.

How do others handle this??

thank you for any comments.


Dave
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#2 User is online   Tim Parris Icon

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Posted 07 July 2010 - 10:35 AM

View PostGORANDMARSASK, on 06 July 2010 - 09:03 PM, said:

I have talked to Intuit support twice on this but am wondering how others handle this.

In the environment setup one establishes pricing for returns and indicates what the HST/GST rate is and the PST. This sets the default 'taxes' to be charged on invoices.

But what happens if clients live in different provinces. As I heard at a CRA seminar on the HST coming to Ontario and BC, it is the residence of te customer that determines which provincial sales tax regime applies.


Where are you executing the contract to prepare the individual's tax return? I customized by invoice statement to add a statement at the bottom saying that the contract was executed in the province of XXX and mailed from that location. If you are executing contracts all over the country, you will have to track where each occurs in your bookkeeping and will need to file a multiple-jurisdiction return as a result.
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#3 User is offline   GORANDMARSASK Icon

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Posted 14 July 2010 - 02:55 AM

View PostTim Parris, on 07 July 2010 - 04:35 AM, said:

Where are you executing the contract to prepare the individual's tax return? I customized by invoice statement to add a statement at the bottom saying that the contract was executed in the province of XXX and mailed from that location. If you are executing contracts all over the country, you will have to track where each occurs in your bookkeeping and will need to file a multiple-jurisdiction return as a result.


Tim that really did not answer question/problem....assuming one did everything you suggested in terms of customizing inovice for a customer...how does one avoid having to 'override' standard provincial tax being included on invoice if one sets a pctge for provincial tax in the options menu?
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#4 User is online   Tim Parris Icon

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Posted 14 July 2010 - 10:41 AM

View PostGORANDMARSASK, on 13 July 2010 - 09:55 PM, said:

Tim that really did not answer question/problem....assuming one did everything you suggested in terms of customizing inovice for a customer...how does one avoid having to 'override' standard provincial tax being included on invoice if one sets a pctge for provincial tax in the options menu?


If you do what I just suggested, you will not need to override the standard provincial tax.
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#5 User is offline   dunner Icon

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Posted 14 July 2010 - 12:44 PM

Actually I ran into this with a client of mine who sells through a web-site across Canada and internationally. I called CRA about handling HST and what rates to charge. I was told that the rate to charge depended on the residence of the customer so it is a reality that you may have to charge various tax rates when dealing across provinces. That wouldn't change filing my tax return, though, to allocate my business income to multi-jurisdictions since I don't have a permanent residence in any other province.

Various provinces also have a retail sales tax that is paid on services, even when those services are provided outside the subject province. The key is to look at the sales tax rules for the province your customer is in. Some, for example, Manitoba, would normally charge RST on subject services from out-of-province to a Manitoba resident but only if you are advertising for that business in Manitoba. Even then, it's the customer's responsibility to self-assess the sales tax.
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