Entering sales tax paid for an expense as a separate expense

mpr2023 · ‎February 27, 2023

Hello,

We purchased an inventory item (trailer) from overseas and imported it into Ontario, Canada. The invoice and payment for the item to the foreign seller does not include sales tax (HST). We are charged GST from our customs broker and PST from MTO/Service Ontario. We have 3 separate expenses to enter but it will not allow me to enter the HST/PST/GST paid to my ITC's on a line item in my expense or bill entries.

For example:

Invoice001:
Purchase Price of trailer: 10,000.00
0 HST paid to foreign seller.

Invoice002:
Import fees : 300
5% GST paid towards invoice 001: 500.00 <need to apply this to my ITC's not as a line item under inventory.
HST paid on invoice 002: 39.00

Invoice003:
Licensing/ownership fees: 32.00
8% PST paid towards invoice 001: 800.00
No HST charged on the $32 by MTO.

The current method I have found in this community and by searching online is to edit the HST at the bottom of the expense to reflect the HST paid and it will apply it to my ITC's.

The problem with this is that if you were to touch one of the line items in the invoice it will recalculate the HST without prompt. So if someone else in the company were to go in to make a correction or something to the invoice and not have that receipt on hand they will have to find it to match the calculation. and what if they didn't notice it before making an adjustment and saved, that would be thousands of dollars in ITC's gone.

I understand its rare for someone to be going in an editing an already posted expense but the fact this possibility exists makes me uneasy. Maybe there was a typo and when corrected it would cause a massive asset loss.

Is there a better way to do this or has QuickBooks completely overlooked this issue? I could imagine the same issue would arise from any business' buying items privately and paying HST on ownership transfers in Ontario.

I have only been a customer of quickbooks for a handful of days and to find this problem not being addressed is extremely disappointing and makes me question if quickbooks online is just for self employed subcontractors with extremely simple books.

Trish_T · ‎February 27, 2023

Hi mpr2023,

It's great to see you in QuickBooks Community. Welcome! QuickBooks Online provides exactly what you need to record and track sales tax on imported items. I'd be glad to show you how!

Follow these steps to record Canadian Sales Tax paid on imported goods;

1. From the left menu, select + New and then Expenses

2. Under Category details, in the Category/Account column, select an expense account related to the imported goods, on the first line

3. Enter 0.01 in the Amount column

4. Choose a Sales tax code that represents all tax types paid
Note; if you paid both GST and PST on the imported goods, select a GST+PST code

5. On the second line, in the Category/Account column, select the same account

6. Enter -0.01 in the Amount column

7. Select “Out of scope” for the tax code

8. Edit the fields below the Subtotal to reflect the amount of tax paid for each tax type

9. When completed, hit Save.

You're all set!

Please don't hesitate to reach back out with any other questions. We're always happy to help!

mpr2023 · ‎February 27, 2023

Thanks for the reply, however you completely ignored what I said and told me to do it the way I am ding it already and disregarded the problem I am having with doing it that way.

Why do I need to enter a fake expense of 0.01 and edit the line after subtotal to trick the system into thinking its an expense entry? Your system will automatically recalculate the entry if I select or modify anything above it. will your company not have a professional accountant and/or developer look into this to add the appropriate functions for your customers to have the ability to do this without some strange trickery?

Why are you not taking this seriously? My books are serious to me, but it looks like they might not be serious enough for you to have someone look into this.

Quickbooks takes monthly subscription fees from users for a service, not a one time fee fir a static product, I would hope that some of that goes into R&D to improve the service provided.

This is a significant feature that is missing. WHY?

mpr2023 · ‎February 27, 2023

Allowing your customers to select HST paid account in the Catagory/Account would allow me to apply the taxes paid to my ITC's total as a line item in my expense, just disable the user from selecting a tax code on that line item when that account is used and tax wont double calculate on itself.

This is an extremely simple fix. can you please relay this to a developer?

s_reynolds · ‎July 30, 2023

I have to agree with mpr2023. This is a serious oversite on QB's part. This is NOT an uncommon scenario. We should not have to use a work-around to accomplish something that should be straight forward.

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Entering sales tax paid for an expense as a separate expense