QB records the PST payable on invoices, but it does not adjust the PST payable for the PST purchases. How do you correct this? If you journal it - to what accounts?

Hey Bell39,
What province are you in?
Check with the local tax authority first because here in BC there is no such thing as "ITC's" for PST which is why QBO does not track them.
Unfortunately for us, PST paid on purchase a is NOT refundable through your standard PST return
PST paid is just another cost which is why it is posted to the same ledger as the expense you are posting.
Maybe it is different where you are but here in BC we can only claim back PST 'paid in error' using a special form and lengthy process. 🤯👎
Like GST it is an "end-user" tax so If you are buying goods for resale they should be sold to you exempt of PST but YOU have to tell them at point of sale.
I hope this helps get you on the right track

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Thanks
McBride Bookkeeping

Hi bell39-shaw-ca.

 

Having your sales tax show up in the correct accounts for purchases and sales is crucial to keep your filings and accounts correct and up to date. I'd be happy to point you in the right direction for this.

 

As McBrideBookkeeping stated PST sales tax is different depending on which province you're in or tracking for. I recommend contacting the CRA to find out about the sales tax laws in the province in question. You can also reach out to your accountant as they're trained in these laws and how to make these kinds of entries. If you don't have an accountant no worries, we can help. You can find an accountant by going to My Accountant>Find a pro to help in your QuickBooks Online account to find one in your area.

 

If you have any questions let us know and we'd be happy to help.

Good Day Nick,

 

I believe this is something critical that QuickBooks development team need to look into

I opened a case number ********** for similar issue and still awaiting on response.

 

I have a client based in Saskatchewan, the sales taxes in the that province is 11% ( 6% and 5% for provincial and Federal respectively).

The tracking on Sales tax on invoices issued to customer is working properly  with the below breakdown:

1. GST Collected and allocated to Liability account GST/HST Payable  5% 

2. PST Collected and allocated to Liability account PST SK Payable 6%.

 

However the tracking of the Above Sales taxes on Bill is not working

For example

A Vendor bill my client for the service 111( Including PST and GST)

if Quickbook show on the invoice the split as follow

Telephone  119.05

GST Paid      5.95

PSt Paid        7.04

       Cash /CC/AP       132.14

But when positing to the actual account, we have the following

Telephone 119.05

GST Paid  5.95

Telephone  7.04 ( instead of PST SK Payable account)

Cash /CC/AP       132.14

This need to be looking as we are not currently offsetting the PST Collected with the One's paid

 

Find attached a pdf showing the situation above

 

 

Are you sure you can claim back PST in SK?

 

You CANNOT claim it back here in BC, it DOES NOT work like GST and I understood it was the same in SK also? PST ITC's or Input Tax Credits are not a thing, there's nowhere to put them on your Tax return either.

https://www.saskatchewan.ca/business/taxes-licensing-and-reporting/provincial-taxes-policies-and-bul...

 

So the Accounting you're seeing would be correct. Claiming it back would be wrong.

Check out this Article and contact a local Tax expert before you go any further

https://www.eprcpa.ca/provincial-sales-tax-pst-in-saskatchewan-explained/

 

Hope this helps ! 

Please mark this answer as a helpful solution if it answers your question
Thanks
McBride Bookkeeping

SASKFINANCE has confirmed that you can credit what you have paid for PST on purchases for resale but you have to NET it against your payable.  There is no line item that you can put that in on their filings.  You have to just reduce the amount that you owe.  They said you also cannot report a negative filing - if you are in a negative situation you are to record a NIL return until the point that you are back into an owing position.  

 

QUESTION - can you post this to PST payable in your line item on your enter bills?  Will this NET itself for reporting?

You cannot record a PST credit for consumables by the user - you can only be PST exempt on purchases for resale.  If you purchase something for resale and the vendor does not PST exempt your invoice you can credit back the PST paid by netting it against what you owe for what you have collected.  

 

You do not get a credit for PST on a phone bill only for items resold.