Hi there DAMLCM,
It's crucial that you use the correct sales tax codes on your income and expenses transactions. This ensures the most accurate sales tax filings possible. QuickBooks Online makes it easy to account for the sales tax you pay and collect, but it's important that you know the difference between the different codes available. Let me give you a hand.
If you refer to our article on Common sales tax codes, you'll see that BC currently has 3 options:
- GST BC: This is Federal tax (GST) only and is at a rate of 5%.
- PST BC: This is BC provincial tax only and is at a rate of 7%.
- GST/PST BC: A combination of Federal and provincial tax at a rate of 12%.
The code that you've been assigning to your transactions is HST (BC) and is an old code from the brief period of time when British Columbia adopted Harmonized Sales Tax (HST). The rate is at 12% which is the same as that of GST/PST BC. Using the HST (BC) sales tax code increases your GST/HST Payable by the total of the 12% charged. Using the GST/PST BC sales tax code increases your GST/HST Payable account by the 5% GST that's charged, and increases the PST Payable (BC) account by the 7% PST charged.
The best way to rectify this is to change the sales tax codes that you've used on your transactions. There isn't a way to do this in batch so you'll have to make changes to each transaction individually. You should also consider reaching out to your accountant as they may have other professional suggestions and can guide you on the creation of a journal entry if necessary or applicable. Invite your accountant to work with you in QuickBooks through the My Accountant tab, or refer to the Find a pro to help button to find a ProAdvisor if you're not already working with an accounting professional.
I know you'll have this sorted in no time. Take care and enjoy the rest of the week!
