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Pay sales tax

SOLVEDby QuickBooks5Updated October 27, 2023

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EN: https://quickbooks.intuit.com/learn-support/en-ca/help-article/other-articles/pay-sales-tax/L6rrxxRES_CA_en_CA?uid=lckyaiyd

You may be required to collect taxes for certain goods and services you offer. QuickBooks Desktop helps you keep an accurate record of these taxes so you can easily monitor and remit them to the appropriate tax collecting agency.

This article is part of a series on Sales Tax. It covers the usual sales tax workflow in QuickBooks Desktop.

It also helps you complete other sales tax-related tasks.

If you encounter problems while working on your sales tax, see Resolve common sales tax issues.

Before paying your sales tax, run a Tax Agency Report as it will provide information that you can use when you fill out your state/provincial sales tax forms.

DO NOT use Write Checks or Pay Bills windows to pay your sales tax to avoid errors in your bookkeeping and sales tax reports.

When it's time to pay your sales tax, you may want to review the Tax Agency Report. Then use the File Sales Tax window to file your sales tax in QuickBooks Desktop and create and pay your sales tax bill.

  1. Go to the Sales Tax menu, then select File Sales Tax.
  2. If you receive an error saying your Sales Tax is not ready to file:

    • You will see this message when QuickBooks detects that you have sales tax transactions that are unreported or unpaid. This means you have transactions that do not have a sales tax item associated with them (or a transaction was modified after you filed your sales tax). As a result, QuickBooks identified these transactions as 'unreported' or 'unpaid'. You'll need to correct these amounts before your next filing period.
    • To resolve these 'unreported' or 'unpaid' sales tax amounts, from the File Sales Tax screen, select Resolve, then from the Resolve your Sales Tax screen, select from the following options:
      • ...just an error. Move it to an Income or Expense Account. Select this option if you know that the sales tax returns you've already filed are correct and that the unreconciled amount is an error. QuickBooks Desktop then creates a general journal entry to move that unreconciled amount from the tax liability account to the Income/Expense account. The account balance of the tax liability account is reduced / increased by the amount that was detected.
      • Add to my next sales tax return. Select this option to move this amount to your next sales tax return. QuickBooks Desktop then creates a general journal entry to remove the unreconciled amount and increase / decrease the tax on sales or tax on purchase line as selected by the user.
      • Claim a refund or Pay the amount now. Select this option if you want to remit the unreconciled amount to the government now. QuickBooks Desktop then creates a general journal entry to move the unreconciled balance from the sales tax account to the Accounts Receivable or Accounts Payable account. Your next steps should be to send a letter to the government accompanied with a cheque if you need to pay them.
  • Select the Tax Agency drop-down arrow, then select the sales tax agency (e.g. Receiver General).
  • Check the dates that QuickBooks Desktop shows in the From and To fields.
  • The detail area shows all the lines in the agency's sales tax return, with the balance owing or receivable at the bottom. If there is no return in QuickBooks Desktop for a particular sales tax, the detail area is empty.
  • If your sales tax return is NOT ready to file, you should resolve this issue.
  • If you need to make an adjustment, select Adjust Return.
  • Select File Return.
    • If you receive Error # 299: Your file cannot be processed due to a formatting error when attempting to submit your return to the CRA, ensure that you have entered your 15-digit CRA Business Number in QuickBooks (Company > Company Information).
  • (Optional) Print a copy of the QuickBooks Desktop sales tax return for your own records.
  • Select File Return
  • Next:
    1. If you owe money.
      • From the How Would You Like to File Your Return window, select:
        • File Online if you wish to submit your return online withthe CRA
        • Paper or other filing if you wish to submit your return to the CRA outside of QuickBooks.
      • Select Yes if you wish to print the report before filing.
      • Select Pay Now or Pay Later
        • If you choose Pay Now, select OK to the congratulations message.
        • In the Pay Bills window, select the amount owing to the sales tax supplier.
        • Enter the date, payment method, and bank account.
        • Select Pay Selected Bills.
        • Review the Payment Summary.
        • Select Print Cheques if you want to print the cheque now
    2. If you have a refund:
      • From the How Would You Like to File Your Return window, select:
        • File Online if you wish to submit your return online withthe CRA
        • Paper or other filing if you wish to submit your return to the CRA outside of QuickBooks.
      • Select Yes if you wish to print the report before filing.
      • Select the receivable account on the refund window
      • Select Receive Now or Receive Later
        • If you choose Receive Now, select OK to the congratulations message.
        • In the Receive Payments window, enter the amount about to receive from sales tax agency, put the correct date and all necessary information.
    3. If your amount due is $0:
      1. From the How Would You Like to File Your Return window, select:
        • File Online if you wish to submit your return online with the CRA
        • Paper or other filing if you wish to submit your return to the CRA outside of QuickBooks.
      2. Select Yes if you wish to print the report before filing, then select OK.

Are you required by the Canada Revenue Agency (CRA) to pre-pay sales tax in regular installments?

Check with your accountant or the Canada Revenue Agency (CRA) to see what rules apply to you.

When you make one of the installment payments, you do not create a sales tax return each time. For GST, HST, or QST, you write a cheque and use the Items tab to mark it as a sales tax installment.

  1. From the Banking menu, select Write Cheques.
  2. From the Pay to the Order of drop-down, select the sales tax agency, such as Receiver General.
  3. Enter the Installment, the dates you are remitting for and your Business Number number in the Memo field.
  4. From theItems tab, in the first blank line, select the installment sales tax item from the Item drop-down, such as "GST installments" or "QST installments".
  5. The Description and Customer Job fields fill in automatically. Check that the tax agency in the Customer field matches the one in the Pay to the Order of field.
  6. In the Amount field, enter the amount of this installment, then press the tab key on your keyboard.
  7. The amount transfers from the detail area to the cheque.
  8. Select Save & Close.

When you file your sales tax return at the end of your sales tax year, you will see this payment included on the installment line of the return

Do you need to unfile and refile sales tax?

To unfile sales tax previously filed:

  1. From the Lists menu, select Chart of Accounts.
  2. In the Chart of Accounts screen, right-click on GST/HST Payable, then select QuickReport: GST/HST payable.
  3. Select Modify Report, then change the date to the last filing date.
  4. Edit the journal entry created by QuickBooks, with the memo "File Sales Tax", then press CTRL+D to delete that journal entry.

To refile your sales tax:

  1. From the Sales Tax menu, select File Sales Tax.
  2. On the File Sales Tax screen, select your tax agency (e.g., Receiver General).
  3. Select the date, then select File Return.
  4. Select File Online or Do Not Submit a Return, then select Continue.
  5. Select Yes if you would like to print your sales tax return before filling.

If you want to check the sales tax transactions or add memos to them, you can view and edit them in the agency's sales tax payable account register.

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