HST Tax Guidelines

If you use First Nations Exemptions on HST, you can continue using GST and PST as separate taxes, to allow easier exemption. They can just be re-labeled fHST and pHST.

Harmonized Sales Tax (HST) will be coming into effect in Ontario and British Columbia as of July 1, 2010. To help ensure a seamless transition from GST/PST to the combined HST, here are a few things to be aware of regarding HST in Executive.

Setting up HST in Executive using Tax 3

To set up HST, go to Maintenance-System-Tax Setup-Taxes. We recommend making Tax 1 (PST) and Tax 2 (GST) Inactive, and setting Tax 3 to HST with the correct rate (13% for Ontario, 12% for British Columbia). This allows you to make GST active as Tax 2 if necessary (for example: sales to provinces not covered by HST, if applicable).

The tips below assume that you are using Tax 3 for HST. If you instead change Tax 1 to HST instead of PST, any Returns/Reports mentioned below that still reference the original PST rates will be adversely affected, as some PST transactions will be mixed in the the HST transactions in the Daily Tax Report #10 that could cause confusion, and may cause PST to be calculated with the wrong rate.

Layaways

Executive will keep the original GST/PST rates from the time of layaway creation. Since layaways do not become final, taxable sales until they are fully paid, any layaways that were created before July 1, 2010 may need to be returned on June 30, 2010 and reissued on July 1, 2010 using HST as the sole tax.

Please consult your accountant or tax authority if you have any questions regarding taxation on partially paid layaways, or on any items that were not taxed with both GST and PST to see how they should be reissued with HST.

Returns

Executive will keep the original GST/PST rates from the time of the original sale as part of the return. When you are returning the item on or after July 1, 2010 that was purchased before July 1, 2010, the HST box will not be checked off and the PST/GST boxes will not be visible but are still checked off (as evidence by the subtotal/total). The Daily Report #10 will work much the same, with the Total reflecting the GST/PST for that day, but with only the HST column visible on the report as it is the only active tax. If you need to see the GST/PST columns instead of just the totals, you could make those taxes active temporarily for the purpose of running the report.

Product Default Taxes

By default, new products are assigned the active taxes at the time of creation. Since you will be using Tax 3 for HST, this was not active when the items were created, and therefore will not be applied to each item by default.

We provided the HST Update Utility that you can download and run to update your product taxes. This was made available to download before June 30th, 2010, and details were sent out on that date regarding download links and usage.

Service Tax

To apply HST to various Services, you can go to Maintenance-System-Tax Setup-Service Tax Setup and assign HST to Labour/Materials based on Service Department. GST/PST settings will not be carried over to HST, so HST is not assigned to services until this is completed.

Tax Exemptions

If any customer profiles need to be marked as HST Exempt, this can be done from the customer profile the same way that it worked with GST/PST.

Past GST/PST Exemptions may work differently with HST, so please consult your accountant or a tax authority for further details on exemptions.

Multiple Location Stores

If your store has more than one location, you will need to update the taxes at Maintenance-System-Tax Setup in each location. Service Taxes will also need to be redone in each location. The Product Default Taxes will only need to be updated in the first store, and changes will be applied to additional locations during regular importing/exporting (so you should do an import/export after updating to ensure the other stores are updated as well).

If your store has multiple locations, but they are not connected via importing/exporting, they are considered individual stores and will need to be updated individually.

We provide this document for information purposes only, as we are not tax professionals. Please refer to your accountant or tax authority for complete rules and guidelines for HST in your province.