How do I exclude PST from costs that I add to an invoice? (We remit GST only, therefore our "costs" include the base cost + PST, when I add GST tax code to the invoice it calculates GST on the PST amount included in our cost, which is incorrect)

Hi Jessica, 

 

Thanks for reaching out in the Community. QuickBooks Desktop allows you to manage your taxes with ease. I'd be happy to share more info on this. 

 

When creating your invoice, you have the option to select 'G" or GST Only. You can find this under your tax column. If you don't have this, I recommend checking to make sure your taxes are set up correctly on your account. Let me know if you have questions about this. In the meantime, check out some of these helpful resources below:

• Set up sales tax in QuickBooks Desktop
• Show multiple sales tax items on an invoice
• How to resolve common sales tax issues
• Handle cash basis sales tax 

I'll be on standby in case you need anything. :) 

Hi James, Thanks for your reply. I have previously been through the links you suggested. My tax codes are set up correctly, I have the option to add GST my problem is that when I "add costs" to an invoice they include PST. Therefore when I choose to add GST it calculates on both the base price and the PST which is incorrect. I've displayed the issue as clearly as possible in my attachment. Is there a solution for this? Thanks!

Technically, that is correct.  The PST you pay becomes part of your cost. QB now calculates GST on the Cost. 

That being said, there is no harm in in tracking PST separately even if you are registered to collect the Tax. This way, the Cost added to invoices would be the true cost of the product - without any taxes.

Hi, When I receive an invoice that includes PST I allocate any PST to our PST sales tax item. To me this is separately tracking PST however QB still lumps it in with my cost on any expense reports or when I try to add costs to an invoice. Do you have a different method of tracking PST separately? (That would result in being able to add true costs to an invoice) Thanks

Hello @Jessica,

It appears that you, as the vendor to your customer, have had to pay PST on your laid down cost, but you are not charging PST to the client because a custom window is considered 'real property', which is tax exempt in MB (I'm assuming you are in MB due to the manual tax calculation in your example).

When you do not charge PST to your client but you are paying it to your vendor, you must consider your original cost + PST as your overall cost for that item. Then you would apply the mark-up you want, and charge GST on the marked up amount. I'm not sure why you think that GST should only be added to the original cost . . . ?? Are you selling the item at cost? Even so, you would charge your client your (Cost + PST) x 5% GST. You collect it on whatever amount you are selling the item for, whether you are selling at cost or at cost-plus. If you don't, you will be losing the PST you paid to the vendor as it is not recoverable. Laid down cost always includes PST.

The thread was a little confusing, so I hope that I've addressed your issue.

Rich Text editor in the forum is not working for me so I had no choice but to use HTML, which is fairly tedious. Perhaps Intuit advisors could address this?

Hi Rochelle, Unfortunately this doesn't offer a solution. Also, your tax analysis isn't correct, PST is not subject to GST (on a quoted job the additional charge will get included in your profits inadvertently but on a cost plus clients would be able to see the incorrect tax calculation).

Please look at the Vendor (Ministry of Finance) setup. It should look like the screenshot below. You will have to create an Expense type Account to track the PST you pay but do not recover on your invoices.