I am in Sask and my out of province Input tax credit purchases from HST and QST are not deducting on line 108. I need to know how to set the QST and HST so they do.

Hello @kerriann ,

If you are in Saskatchewan, and your vendors are shipping goods to you in Sask., they should not be charging you HST or QST.  Businesses shipping to Saskatchewan should be charging you 5% GST only, and no PST at all if they are not registered to collect tax in Saskatchewan.  If they are registered to collect tax in Saskatchewan, then the most PST they can charge you is 6%.

Place of Supply rules state that vendors must charge the GST tax of the jurisdiction where they are shipping the goods to.  That aside, a lot of people don't know that and do it incorrectly.  In the event that you don't want to bother your vendors to correct the sales tax amount they are charging you, yes, you are able to claim HST as an ITC on your regular GST return.

Unfortunately, any QST you pay is not refundable as it is a provincial sales tax.  It becomes part of your cost.  When entering an invoice where a vendor has charged you QST, you don't need a tax code because it's not going to be remitted anywhere.  You would just enter a line posting to the same account as you are posting the expense/COGS to on the other lines of the bill for the amount of the QST and notate it in the description field.  Unfortunately, you paying QST on vendor invoices does not relieve you of having to self-assess the 6% Sales Tax in SK and remit it with your regular remittances.  Not only that, but you would have to remit 6% of your total cost, which includes the cost of the items + the 9.975% QST you may have been charged.  In this case, because there is no ITC for you on QST, I would call the vendor and insist that they remove the QST from your invoice.  That way you only have to self-assess SK 6% on the cost of goods purchased.  Note that this also becomes part of the cost of your goods, the same as if you had purchased them in Saskatchewan.

Of course, if the goods are for re-sale then you do not have to self-remit the 6% as they would be exempt.  However, if you go ahead and pay an invoice with QST, you simply cannot get that back.  I encourage you to get the vendor to remove it, or you can remove it yourself and only post the pre-tax amount before paying the bill.  When they call to ask why you haven't remitted the total invoice, you can explain why.

To add an HST custom tax rate:

Go to Taxes --> Sales Tax -->  Add custom rate

If you are going to set up an HST code for Ontario, for example, you could name your custom code HON and put HST ON in the description.  Since you are not collecting HST but only paying it on vendor bills, do not check off I collect this on sales.  Rather, check the box that says I pay this on purchases.  Enter tax rate (13%).  Choose Liability Account, and choose Input tax credits (ITCs).

You can now use this tax rate on any purchase documents where someone from Ontario (or any other HST jurisdiction that ships to you) is charging you HST.  If you are receiving goods from other HST jurisdictions, you would set up codes for those in the same way.  This way they will all be linked to the proper ITC line in your GST return.

Hope that helps.  Good luck!