This faq explains how to make the necessary changes to your company file to prepare for the HST changes for Ontario occurring on July 1, 2010. Updating your file may take some time. How long will it take?

Important! The following steps apply to QuickBooks Pro, Premier and Enterprise 2009/2008 only and they are specific to Ontario.

If you use Pro/Premier/Enterprise 2009/2008 and you live in BC, follow the steps here.

If you use EasyStart 2009/2008, follow these steps here.

If you use Multicurrency or 2007 and earlier, follow the steps here.

If you use 2010, following these steps.

 

Links to more information about the HST changes

• When should I start charging HST?
• Videos: Harmonized Sales Tax
• CRA: HST main page
• CRA: HST for Ontario
• CRA: Transitional rules
• Ontario government: Are you HST ready?
• CFIB: HST checklist for Ontario
  

Watch this video on how to create the HST sales tax items for HST. It is 2 minutes in length.

Or you can follow along with the text below.

 

Create the following eight sales tax items for the new HST sales tax.

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 the Sales Tax menu and select Item List.
2. On the Item List window, right-click anywhere and select New.
3. On the New item window, select Sales Tax Item as the type.
4. Create the following 8 sales tax items using these attributes.

Watch this video on how to create the HST sales tax codes for HST. It is 2 minutes in length.

Or you can follow along with the text below.

 

Create the following two new sales tax codes for HST.

1. Sales Tax menu and select Sales Tax Code List. Right Click and select New.
2. In the Sales Tax Code box, type H (if not already used).
3. Select Taxable.
4. For Tax item for Purchases, choose HST on Purchases.
5. For Tax item for Sales, choose HSTon Sales. Click OK.
6. Create another sales tax code and title it ZON.
7. Select Taxable and for Tax Item for Purchases select HST (ITC) Zero Rated. For Tax Item for Sales select HST Zero Rated Sales.

Do not perform this step until July 1!

For every customer, vendor, item and account that you assigned a sales tax code to, you have to update them now to use the new HST code. 

To quickly identify whether there is a default sales tax code associated with an entry in your list, customize your list view by adding the Sales Tax Code column to the lists.

To do this for your customer list, for example, open your Customer Centre, then right click anywhere in the list; select Customize Columns, then add the Sales Tax Code column to the Chosen Columns area. Now you can see which customers have a sales tax associated with them.

 

1. Edit your customer and vendors to use the new HST code.
   1. Go to your Customer Centre, right click on the customer, and select Edit Customer:Job. 
   2. Click Additional Info tab. In the Sales Tax Information section, select the new HST tax code. Now do the same for the vendors whose tax code you want to change.
   3. If you don't see the Tax Code box, then you don't have the preference that allows you to assign tax codes to your customers/vendors turned on. To turn this on, go to Edit, Preferences, select Sales Tax, then under Company Preferences, select the Use Customer and Vendor Tax Codes checkboxes.
2. Edit your items to use the new HST code.
   1. Go to Lists menu and select Item List.
   2. Right click on an item and select Edit Item.
   3. Change the Purch Tax Code and the sales Tax Code to the new HST code.
3. Edit your Chart of Accounts to use the new HST codes.
   • Go to the Company menu and select Chart of Accounts. Any account that has a sales tax code assigned to it, change it to use the new HST tax code.
4. Edit your sales tax preference to use the new HST code by default.
   •  Go to the Edit menu and select Preferences.
   • Click Sales Tax, then Company Preferences.
   • In the Assign Sales Tax Codes section, for taxable items, select H (or whatever code your created for the HST code in step 3 above). For Non-taxable items, select ZON (or whatever code you created for the zero-rated HST code in step 3 above).