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MattOV
Level 1

Specify a Different Sales Tax Liability Account for Sales and Purchases

I'm working with a Canadian customer that has two Liability Accounts setup, one called "26600 - HST Purchases" and another called "26601 - HST Sales", both are of Type "Other Current Liabilities" and Detail Type "Current Liabilities".  The issue is when we add line items to an invoice and specify the Sales Tax of "H", it is posting tax to the "26600 - HST Purchases" account.  They'd like invoices to post tax to "26601 - HST Sales" instead.

 

Is there a way to have the Sales Tax item "H" post to a different Liability Account for when put on Invoices vs. when put on Bills?  If I go to Manage Sales Tax, I can see where I can edit the "H" Sales Tax Item, and it lists the Account Type as Liability for both Purchases and Sales, but is there any way to specify which Liability account?  They also have a lot of other accounts of type "Other Current Liabilities", so how does QB choose which one to use for a given Sales Tax Item?

 

By the way, my client is just now switching from a software that did most of the accounting through Journal Entries.  Due to the nature of how Journal Entries work, they were able to post to the two accounts listed here without any issues in their old solution.  The behavior described in this post happens when making invoices manually in QB.

 

Thank you and let me know if I can provide any more details.

Solved
Best answer November 27, 2018

Best Answers
Aphylis
Moderator

Specify a Different Sales Tax Liability Account for Sales and Purchases

Hi there MattOV,

 

You'll be glad to know that when you turn on the Taxes for a newly created account everything will be automated.

 

QuickBooks Online Canada now combines the GST and HST to easily keep track of your taxes. This 2 (GST/HST Payable, GST/HST Suspense) are default accounts and automatically created. Regardless you created your own GST and HST accounts, QuickBooks Online will still use the default accounts.

 

The Tax Codes that will be used when you have enabled taxes will also be combined and called HST with 2 letter province code. An example is HST ON for Ontario.

 

You may have used the migrated Tax codes from different Accounting software or QuickBooks desktop. Since Tax rate names in QuickBooks Canada is simplified and combined with GST.

 

If you will use the correct Tax Code with QuickBooks Online, transactions will be posted on to the correct accounts and Tax return will be corrected.

 

For more information on Taxes:
https://community.intuit.com/articles/1763796-sales-tax-overview
https://community.intuit.com/articles/1771519-common-sales-tax-codes

 

Drop me a comment if you have further questions.

 

View solution in original post

3 Comments
Aphylis
Moderator

Specify a Different Sales Tax Liability Account for Sales and Purchases

Hi there MattOV,

 

You'll be glad to know that when you turn on the Taxes for a newly created account everything will be automated.

 

QuickBooks Online Canada now combines the GST and HST to easily keep track of your taxes. This 2 (GST/HST Payable, GST/HST Suspense) are default accounts and automatically created. Regardless you created your own GST and HST accounts, QuickBooks Online will still use the default accounts.

 

The Tax Codes that will be used when you have enabled taxes will also be combined and called HST with 2 letter province code. An example is HST ON for Ontario.

 

You may have used the migrated Tax codes from different Accounting software or QuickBooks desktop. Since Tax rate names in QuickBooks Canada is simplified and combined with GST.

 

If you will use the correct Tax Code with QuickBooks Online, transactions will be posted on to the correct accounts and Tax return will be corrected.

 

For more information on Taxes:
https://community.intuit.com/articles/1763796-sales-tax-overview
https://community.intuit.com/articles/1771519-common-sales-tax-codes

 

Drop me a comment if you have further questions.

 

View solution in original post

P2w2001
Level 1

Specify a Different Sales Tax Liability Account for Sales and Purchases

We are in Canada and want to place a PO to a company in the US.

 

 

We have created a Purchase order template, and, do not need or want the lines:

 

GST on Purchase and PST on Purchase to Print in the PO.

 

How do we remove them.

 

Also, PST is not relevant for us in Ontario.

 

We would like to just have HST show up on our Invoices also. How do we remove tht

 

Thanks You

Angelyn_T
QuickBooks Team

Specify a Different Sales Tax Liability Account for Sales and Purchases

I appreciate you for joining the thread, @P2w2001.

 

I can share with you some insights about preparing purchase orders and invoices in QuickBooks Online (QBO).

 

Once these taxes (GST/PST) are already added in QuickBooks, we can no longer remove them from your transactions' template. As a workaround, you can pick the Out of Scope of Tax option for your US purchases/sales. If the transactions include taxes, you may enter the amount manually. For your guide, I recommend checking out this article: Enter sales tax amount manually.

 

Moreover, you can check out the details from these links to learn more about creating and editing form templates in QBO:

 

If you have any other questions about recording vendor/customer transactions in QuickBooks, please feel free to add a comment below. I'm always here to help. Keep safe!

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