This faq explains how to make the necessary changes to your company file to prepare for the HST changes for Ontario and BC occuring on July 1, 2010. Updating your file may take some time. We recommend you print this faq. How long will it take?

Important! The following steps apply to QuickBooks Multicurrency and 2007 or earlier only.

If you use QuickBooks 2010, following these steps.
If you use QuickBooks 2009/2008 and

• you live in BC, follow the steps here
  
• you live in Ontario, follow these steps 

You have two options for updating your company file to the new HST sales tax codes.

• The first option is to upgrade to QuickBooks 2010 and use the new HST Setup Tool that we are creating and releasing in a product update. This new tool will save you a LOT of time in updating your company file. It will be available the last week of April.
• The second option is to manually make the HST changes in your company file yourself.
• How long will it take to update my company file to the new HST changes?

QuickBooks 2010 is the only version we will be adding a new tool  to help you automatically set up your file for the new HST changes. The HST Setup Tool will save you a lot of time as it allows you to make sales tax changes to multiple customers and vendors, for example.

Otherwise, you have to manually change default tax codes for each entry in your customer, vendor and item lists.

To upgrade to 2010, call 1-877-697-8550.

If you need to start charging HST between May 1 to June 30, you'll need to create a new Sales Tax Code and set the rate for your province (13% for Ontario and 12% for BC).

If you have transitional transactions, (in other words, you need to start charging HST before July 1), you cannot remit the provincial portion of the HST until your next filing period after July 1.

For more information on this, read this faq.

 

1. Go to Lists, and select Tax Codes List.
2. Right click and select New.
3. Add H as the tax code (if it does not already exist), and in the GST Rate, enter 13% for ontario or 12% for BC.  Leave PST at 0.0%.
4. All the HST amounts will be reported under the GST Payable Account so you have to create a report to separate out the HST amounts from you existing GST amounts.
   1. Go to Reports, and select Custom Transaction Detail Report.
   2. Under Column, select Tax Code and click OK.
   3. Export the report to Excel and sort the Tax column by the H code (or whatever code you used for HST). Then create a sum of the transations that used the H code. you need to total.
5. If you are using the File Sales Tax feature, you need to back out the HST amounts to another liability account. (i.e., HST Liability). 
   1. Go to Vendors, select Sales Tax, then Adjust Sales Tax Due.
   2. Enter the adjustment date, and for the adjustment account, select Add New, then create an Other Current Liability account and name it HST Liability.
   3. Enter the amount of the adjustment. If the amount you are adjusting is for sales, choose the Tax on Sales. If it is related to purchases, then choose Tax on Purchase. Click OK.
6. After July 1 you can continue to use the H code. For amounts that are still to be reported as PST you can continue to use the S code and the PST Payable account until such time as the deadline has passed. Any additional filings will have to be filed on a Supplemental return.
7. To file the HST returns, enter the amounts manually on the return until such time as you have transitioned completely over to HST and filed with the File Sales Tax feature for the GST/PST.
8. You will also have to manually update your item, vendor, customer and account default sales tax codes.

• Videos on Harmonized Sales Tax
• CRA: HST main page
• CRA: HST for Ontario
• CRA: HST for BC
• CRA: Transitional rules
• CGA booklet: HST in BC
• Ontario government: Are you HST ready?
• CFIB: HST checklist for Ontario