Although the new HST (for ON and BC) begins officially on July 1, 2010, the CRA has created some transitional rules that may mean you need to start charging HST as early as May 1.

If you do end up charging HST prior to July 1, you can't file the provincial portion of the HST until after July 1. For example, if you charged HST before July 1 and your next filing period happened before July 1, you should only submit the GST portion of the harmonized sales tax. You can remit the PST portion on the first return that follows the July 1 date.

The steps below explain how to remove the provincial portion of the HST charged during the transitional period if you need to file your GST before July 1, then add the provincial amount back in to the next filing period that occurs after July 1. These steps are for QuickBooks versions 2008 and later. Although you can follow along for earlier versions, some of the access points may be slightly different but the basic principal applies.

Note that if you file monthly, you'll have to complete this step a couple of times.

1. Run a QuickReport on the H tax code.
   
   1. Go to Lists menu and select Sales Tax Code List.
   2. In the Sales Tax Code List, select HST (or whichever tax code you used for HST).
   3. Click Reports, then click QuickRreport.
   4. Modify the date range so it covers the period where you had transitional transactions on HST (prior to June 30).
2. Filter the report by transaction type and total the sales and the purchase amounts for the period.
3. Calculate the appropriate provincial portion of the HST for both sales and purchases:
   • For Ontario: multiply the total on the H tax code QuickReport by 8% or .08.
   • For BC: multiply the total on the H tax code QuickReport by 7% or .07

In this step, you are adjusting the sales tax owing for filing periods that occur before July 1 to remove the amount of the provincial portion of the HST. Note that if you file monthly, you'll have to complete this step a couple of times.

To adjust the sales tax (for sales) in filing periods that occur before July 1:

1. Go to the Sales Tax menu and select Adjust Sales Tax Due.
2. Choose an Adjustment Date that matches the last day of the filing period for which you are submitting now (before June 30).
3. Click the Tax Agency drop-down list and choose Receiver General.
4. Click the Sales Tax Item drop-down list and select HST on Sales (or whatever sales tax item you created for HST on sales).
5. Click the Adjustment Account drop-down list and choose Add new. Create an Other Current Liability account called HST Transitional.

   1. Click the Account Type drop-down arrow and choose Other Current Liability.

   2. Enter a name such as HST Transitional in Account Name field.

   3. (Optional) Select Subaccount of and choose an account such as GST/HST Payable from the drop-down arrow.

   4. Click Save & Close.

6. In the Amount section, enter the sales provincial amount you figured out in Step 1 (don't enter a negative amount), and select Decrease Sales Tax line.
7. Click OK.

To adjust the sales tax (for purchases) in filing periods that occur before July 1:

1. Go to the Sales Tax menu and select Adjust Sales Tax Due.
2. Choose an Adjustment Date that matches the last day of the filing period for which you are submitting now (before June 30).
3. Click the Tax Agency drop-down list and choose Receiver General.
4. Click the Sales Tax Item drop-down list and select HST on Purchases (or whatever sales tax item you created for HST on purchases).
5. Click the Adjustment Account drop-down list and choose the HST Transitional account you created earlier.
6. In the Amount section, enter the purchases provincial amount you figured out in Step 1 (don't enter a negative amount), and select Decrease Sales Tax line.
7. Click OK.

With this step, you are adjusting the sales tax for the next filing period that occurs after July 1 to add the provincial portion of the HST that you removed from earlier periods. Note that if you file monthly, you'll have to complete this step a couple of times.

To adjust the sales tax (on sales) for the next filing period occuring after July 1:

1. Go to the Sales Tax menu and select Adjust Sales Tax Due.
2. Choose an Adjustment Date of July 1, 2010.
3. Click the Tax Agency drop-down list and choose Receiver General.
4. Click the Sales Tax Item drop-down list and select HST on Sales (or whatever sales tax item you created for HST on sales).
5. Click the Adjustment Account drop-down list and choose the HST Transitional account you created earlier.
6. In the Amount section, enter the same sales provincial amount you used in Step 2 (don't enter a negative amount), and select Increase Sales Tax line.
7. Click OK.

To adjust the sales tax (on purchases) for the next filing period occuring after July 1:

1. Go to the Sales Tax menu and select Adjust Sales Tax Due.
2. Choose an Adjustment Date of July 1, 2010.
3. Click the Tax Agency drop-down list and choose Receiver General.
4. Click the Sales Tax Item drop-down list and select HST on purchases (or whatever sales tax item you created for HST on purchases).
5. Click the Adjustment Account drop-down list and choose HST Transitional account you created earlier.
6. In the Amount section, enter the same purchases provincial amount you used in Step 2 (don't enter a negative amount), and select Increase Sales Tax line.
7. Click OK.