How to Use Sales Tax

The Sales Tax page is where you manage everything related to sales tax for a client: setting up tax agencies, configuring tax rates and rate groups, preparing and filing tax returns, recording payments and installments, and reviewing your tax position at a glance.

This guide walks through every section of the page, step by step, in the order you see on screen.

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Getting Here

1. Open the main sidebar and select a Bookkeeping Client.
2. In the client sidebar, click Sales Tax (under the Setup section).

The page opens to the Overview tab. Across the top you will see four summary cards, and below them the upcoming filing periods and recent filings.

ℹ Info: The Sales Tax page is available only when the Sales Tax entitlement is enabled for your plan. If you do not see it in the sidebar, check your subscription settings.

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Understanding the Dashboard

Top Metrics

Four cards sit across the top of every tab. They give you a quick read on your sales tax position across all filings:

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The Five Tabs

The page is organized into five tabs. Click any tab to switch views:

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Overview Tab

The Overview tab is your starting point. It shows two sections: Upcoming Filing Periods and Recent Filings.

Quick Actions Button

In the top-right corner of the page, the Quick Actions dropdown gives you fast access to every create action on the page:

Upcoming Filing Periods

This section shows every tax period that is coming up or currently open. Periods are grouped by agency. For each agency, you see:

• The agency name, filing frequency, and the period date range with its due date.
• Four summary boxes: Collected (tax from sales), ITCs (tax on purchases), Net Tax, and Amount Due (or Refund).
• If the agency has a "Setup Required" badge, you need to assign dedicated tax accounts before you can file. Click Set Up Accounts to go directly to the agency edit form.

Two action buttons appear for each agency period:

If no agencies are set up yet, you will see an empty state with an Add Tax Agency button that opens the template browser.

Recent Filings

This section shows your last five filings in a compact table:

Click View All to jump to the full Filings tab.

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Filings Tab

The Filings tab shows every tax filing you have created, past and present.

Creating a Filing

You have two ways to create a filing:

Method 1: Prepare from Data (Recommended)

Click Prepare from Data to open the Prepare Filing sheet:

1. Select the Tax Agency from the dropdown.
2. Choose the Period Start and Period End dates using the date pickers.
3. Click Calculate & Review.

The system scans all your posted sales invoices and purchase bills within the date range and calculates the tax amounts automatically. A breakdown dialog opens showing the results.

Method 2: Manual Entry

Click Manual Entry to open the filing form directly:

1. Select the Tax Agency.
2. Choose the Period Start and Period End dates.
3. Optionally set a Due Date.
4. Enter the amounts manually:
   • Tax Collected — total tax you collected on sales.
   • ITCs — input tax credits from purchases.
   • PSB Rebates — public service body rebate amount.
   • Adjustments (Line 104) — adjustments to tax collected.
   • Adj. to ITCs (Line 107) — adjustments to ITCs.
5. Choose a Status: Draft, Ready, Filed, or Paid.
6. If the status is Filed or Paid, enter the Filed Date and optionally a Confirmation #.
7. Add optional Notes.
8. Click Create Filing.

Understanding the Filing List

Each filing appears as a card showing:

• The agency name and status badge.
• The period date range and due date.
• If filed, the filed date and confirmation number.
• Five summary amounts: Tax Collected, ITCs Claimed, Adjustments, Net Tax, and Amount Paid.
• If paid, a green banner showing the payment date and reference.

Filing Actions

Click the three-dot menu on any filing card. The available actions depend on the filing's status:

Submit Filing: Prompts you to confirm. When submitted, the system posts journal entries to record the tax liability in your books and marks the filing as filed.

Record Payment: Opens the payment dialog (see below).

Redo Filing: Resets the filing back to Draft status and reverses any posted journal entries. Use this if you need to correct amounts.

Delete: Removes the filing entirely and reverses any posted journal entries. Only available for Draft filings.

Recording a Payment

When you click Record Payment on a filed return that has a balance owing, the payment dialog opens:

1. The top of the dialog shows the Amount Owing in large red text. If installments were already paid, the breakdown is shown.
2. Select the Payment Account — a bank or cash account from your chart of accounts.
3. Enter the Amount you are paying.
4. Set the Payment Date.
5. Optionally enter a Reference (cheque number, confirmation code, etc.).
6. Optionally record Interest and Penalty amounts if the payment is late.
7. Click Record Payment.

The system posts a journal entry: CR Bank Account, DR Tax Payable.

Recording an Installment

Installments are pre-payments you make toward a future filing period. To record one:

1. On the Overview tab, find the agency period and click Installment.
2. Select the Payment Account.
3. Enter the Amount.
4. Set the Payment Date.
5. Optionally enter a Reference and Notes.
6. Click Record Installment.

The installment amount is automatically deducted from the amount due when you later file that period.

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Reviewing a Calculated Return (Breakdown Dialog)

When you prepare a filing from transaction data, the breakdown dialog opens. This is the most detailed view on the page.

Summary Cards

At the top, four or five summary cards show the calculated amounts:

Return Lines Table

Below the summary cards, a table shows the tax return broken down by line number — mirroring the CRA GST/HST return format (lines 101 through 113C). Each row shows:

Lines marked with an Auto badge are calculated from your transactions. Important total lines (105, 108, 109, 112, 113A) appear in bold. The final amount line (113A or 113C) is highlighted in amber.

✓ Tip: Click any line with a chevron icon (lines 101, 103, 106, 108, 111) to drill down and see the individual transactions that make up that amount. A panel opens showing the date, description, account, transaction type (sales invoice, purchase bill, or journal entry), and amount for each transaction.

Manual Adjustments

Below the return lines, you can enter manual adjustments if needed:

• Line 104 — Adjustments to tax collected: Positive amounts increase tax due; negative amounts reduce it.
• Line 107 — Adjustments to ITCs: Positive amounts increase ITCs (reducing tax due); negative amounts decrease ITCs.

When you type an adjustment, all affected lines in the return table update live. Lines that changed due to your adjustment show an Adjusted badge and turn violet.

Saving the Filing

Click Save as Draft to create the filing with the calculated amounts and any adjustments you entered. The filing is saved as a Draft. You can then review it on the Filings tab, edit it, or submit it when ready.

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Agencies Tab

The Agencies tab is where you set up the tax authorities you report to. Each agency represents a government body that collects tax — for example, the CRA for GST/HST, or a provincial ministry for PST.

Adding an Agency

You have two ways to add an agency:

From a Template (Recommended for Canadian Taxes)

Click From Template to open the template browser:

1. A list of pre-configured Canadian tax agencies appears, grouped by country. Each template card shows the agency name, tax type, jurisdiction, and filing frequency.
2. Click a template card to select it. The selected card gets a blue border and a "Selected" badge.
3. Below the list, fill in your configuration:
   • Registration Number — your business number with this agency.
   • Filing Frequency — Monthly, Quarterly, or Annually.
   • Next Period Starts — the start date of your next reporting period.
4. Click Create Agency.

Creating a Custom Agency

Click Custom Agency to open the agency form:

1. Enter an Agency Name (e.g., "State of New York").
2. Choose a Tax Type: GST/HST, GST Only, HST Only, PST, QST, RST, or Other.
3. Optionally enter a Registration Number.
4. Choose a Filing Frequency: Monthly, Quarterly, Semi-Annually, or Annually.
5. Choose a Reporting Method: Accrual or Cash.
6. Optionally set the Next Period Starts date.
7. Click Create Agency.

⚠ Warning: The agency name and tax type cannot be changed after creation. Make sure they are correct before saving.

Viewing and Managing Agencies

Each agency appears as a card showing:

• The agency name and tax type badge. Custom agencies show a "Custom" badge.
• Registration number, filing frequency, next period start date, and reporting method.
• Any tax rates attached to the agency, displayed as badges with the rate name and percentage.

Click the three-dot menu on any non-system agency card to Edit or Delete it.

ℹ Info: System agencies (those created from official templates) cannot be deleted. They are marked with a system flag to prevent accidental removal.

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Tax Rates Tab

The Tax Rates tab is split into two side-by-side sections: Custom Tax Rates and Rate Groups, with a full table of all rates below.

Custom Tax Rates

Custom tax rates are rates you create beyond the standard system rates. Each rate card shows:

• The tax name, the agency it belongs to, and the rate percentage.
• Whether the rate is collected on sales and/or paid on purchases, shown with green checkmarks or grey X marks.

Creating a Custom Tax Rate:

1. Click New Rate.
2. Select the Tax Agency this rate belongs to.
3. Enter a Tax Name (e.g., "Hotel Tax").
4. Enter the Rate (%) — you can use up to three decimal places (e.g., 8.875).
5. Optionally add a Description.
6. Check the boxes for how this tax applies:
   • I collect this tax on sales — the rate is added to sales invoices.
   • I pay this tax on purchases — the rate is claimed as an ITC on purchase bills.
7. Click Create Rate.

Click the three-dot menu on any custom rate to Edit or Deactivate it.

Rate Groups

Rate groups combine multiple tax rates into a single group. This is useful when a jurisdiction charges more than one tax on the same transaction — for example, GST (5%) + PST (7%) = 12% combined.

Each group card shows:

• The group name, group code, and total combined rate.
• The individual rates that make up the group, shown as badges.
• An optional description.

Creating a Rate Group:

1. Click New Group.
2. Enter a Group Name (e.g., "BC Combined").
3. Optionally enter a Group Code — if left blank, one is generated automatically.
4. Optionally add a Description.
5. In the scrollable list, check the boxes next to each tax rate you want to include in the group.
6. As you select rates, a purple box appears showing the Combined Rate and how many rates are selected. This updates live.
7. Click Create Group.

Click the three-dot menu on any group to Edit or Delete it.

All Tax Rates Table

Below the two sections, a full table lists every tax rate — both custom and system. Columns show the tax name, code, agency, rate percentage, whether it applies to sales, whether it applies to purchases, and its type (Custom or System).

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Settings Tab

The Settings tab has three sections: Tax Account Mappings, How Tax Accounts Work, and Tax Recovery & PSB Rebates.

Tax Account Mappings

This section shows the GL accounts assigned to each tax agency for tracking tax collected and tax paid. Each agency card shows:

• The agency name and tax type.
• The Tax Collected Account — where sales tax collected is recorded.
• The Tax Paid (ITC) Account — where input tax credits are recorded.

Accounts that show "Auto-created" were generated by the system. Click Edit on any agency card to assign specific accounts of your choice.

✓ Tip: If you want to use your own GL accounts instead of auto-created ones, edit the agency and set the Tax Collected Account ID and Tax Paid Account ID fields to your preferred account numbers.

How Tax Accounts Work

Three information alerts explain the tax account system:

1. Account Priority Order: When a transaction needs a tax account, the system checks four places in order: the tax rate's configured account → the agency's configured account → the system account by mapping code → auto-create a new account.

2. Group Rates: When you use a rate group (like GST + PST), each component rate posts to its own agency's account separately. This keeps your tax breakdown clean per agency.

3. Tax Filings: Each agency has its own independent filing periods. You can view collected vs. paid amounts per agency, making it easy to prepare remittances for each tax authority.

Tax Recovery & PSB Rebates

This section is for organizations eligible for public service body rebates under CRA rules (RC4034). It lets you configure:

• ITC Recovery Percentage — the percentage of GST/HST paid on purchases that you can recover.
• PSB Rebate Factors — rebate rates for municipalities, charities, schools, hospitals, and qualifying non-profit organizations.

The panel includes preset profiles for common entity types. You can also create custom recovery profiles with your own percentages.

ℹ Info: This section follows CRA guide RC4034 (GST/HST Public Service Bodies' Rebate) and RC4049 (GST/HST Information for Municipalities). Consult your accountant before adjusting these settings.

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Filing Status Flow

A filing moves through these statuses during its lifecycle:

Draft → Ready to File → Filed → Paid
  ↓                       ↓
Deleted              Redo (back to Draft)

• Draft: The filing has been created but not yet submitted. You can edit or delete it.
• Ready to File: The filing has been reviewed and is ready for submission. You can still go back to editing.
• Filed: The filing has been submitted. Journal entries are posted. You can record a payment or redo the filing.
• Paid: The full amount owing has been paid. The filing is complete.
• Overdue: The filing's due date has passed and it has not been filed. Shown in red.

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Related Reports

From the Sales Tax page, you can also access two related reports via the toolbar search or by navigating directly:

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Things to Remember

• Always set up at least one tax agency before creating invoices or bills that charge tax. Without an agency, the system cannot track tax obligations.
• When you prepare a filing from data, only posted transactions are included. Make sure all sales invoices and purchase bills for the period are posted first.
• Installments are tied to an agency, not to a specific filing. They are automatically applied to the next filing for that agency.
• Submitting a filing posts real journal entries to your books. If you are unsure about the amounts, save as Draft first and review with your accountant.
• If you redo a filed return, the original journal entries are automatically reversed and the filing goes back to Draft. You can then recalculate and resubmit.