tax reports discrepancy
In Feb. I followed QB instruction article to create a liability account for customer deposits, and a product/service item linked to that liability account to process the deposit.
In Feb. I issued a sales receipt for the $1,000 deposit received. I did not charge sales tax per my understanding of CRA rules, so the sales receipt was tax exempt. This sales receipt does *not* show up on Feb. sales tax reports/taxable sales summary.
In May I invoiced for the job and used the service item to credit the customer deposit on the invoice. This service item is tax exempt as it needed to be to issue the sales receipt without collecting tax. The invoice shows the correct, full amount of sales tax calculated on the subtotal before the $1,000 deposit was taken off, so that all looks good.
My problem is that when I print the May Taxable Sales Summary report, it shows a net sales of $X (same amount in GST and PST sections, which is correct), but it also shows an exempt sales amount of $1,000 in the GST section of that report.
When I go into the Taxes section of QBO and go to "file report" for both GST and PST, the amount on the Total Sales line of each report is $1,000 less than the total net sales on the Taxable Sales Report, but the sales tax reports are pulling in the full/correct amount of sales tax collected, so it looks like I have collected too much sales tax for the amount of my total sales the QB is putting on the tax return reports.
Why would QB be reducing my total sales for the month on the sales tax returns by the amount of the deposit that I took off the customer's invoice? This looks like an error to me, but I am not a super advanced bookkeeper and don't understand why this is happening and whether it is a mistake. Any help appreciated.