Sales tax in depth

This one covers how sales tax moves through the app day to day. For initial setup, start with Setting up sales tax. For actually filing, see the return-prep tutorial.

Two directions, tracked separately

• Tax collected — the GST/HST you add to invoices. It isn't your money; GBooks Air posts it to a liability account so your revenue figures stay honest and the amount owing is always visible rather than buried.
• Input tax credits (ITCs) — the GST/HST you pay on business purchases, claimable back if you're registered. Marked on each expense, split out from the pre-tax cost automatically.

Your net position, collected minus ITCs, is what you actually remit (or get refunded). The Sales Tax report keeps a running total on this the whole time.

Rates for all 13 provinces and territories

Current CRA and provincial rates ship with the app for every combination you'd actually run into: GST-only, HST, GST+PST (tracked as two separate taxes, since BC, Saskatchewan, and Manitoba file provincially), and GST+QST for Quebec. You just pick a province on a line, and the app applies the right rate. Nothing gets hand-typed, which removes an entire category of error before it can happen.

Taxable, zero-rated, and exempt

Not everything gets tax added, and the distinctions genuinely matter:

You can set any of the three per line item, so a mixed invoice — a taxable service plus zero-rated goods, say — reports correctly without any workaround.

Meals and the 50% rule

Business meals and entertainment are only 50% deductible, and the ITC claim gets limited to match. Categorize meals to the dedicated meals account and GBooks Air keeps them separated, so that limitation gets applied properly at filing time instead of being discovered, expensively, months later.

PST and QST, specifically

• PST (BC, SK, MB) is its own provincial tax with its own registration and return, and unlike GST, the PST you pay on purchases is usually just a cost rather than a credit. GBooks Air tracks it separately so it never bleeds into your GST/HST return.
• QST behaves a lot like GST, with input refunds included, but files with Revenu Québec instead. It gets tracked as its own tax with its own totals.