As a charity in BC, we can claim a rebate of 50% on the federal portion and 57% of the provincial portion of the upcoming HST. I need/want to set up a distribution code in Payables that will separate both these amounts into two separate GL accounts. I checked technical tips and it appears I can only set this up for one part of this tax, but not both. Please advise.

I suspect the way to deal with this is to dump it all into the HST Recoverable account. All of the HST is being managed by the federal government so there may be no need to break it out.

In any case 6.151076 will result in a recovery of $6.49 on a $112 tax in purchase.

57% of $7.00 = $3.99
50% of $5.00 = $2.50

Total = $6.49

Reallocation % Provincial = 61.48%
Reallocation % Federal = 38.52%

Check with your accountant

There is no need for separate accounts as far as the HST is concerned. If your auditor is requesting this then please post his/her reasons for this. Thanks.

Thank you very much. I think this will work for us. I thought we would need to break out the provincial portion because the GST66 rebate form has spaces for that, but using the reallocation factors will assist with that when the time comes.

My suggestion to "check with your accountant" still stands.

The "reallocation" %'s quoted assumes that all things have the same HST rate. I keep hearing conflictiong information about what may or may not be exemmpt from the provincial portion.

I am not sure that this "HST tax change to simplify business processes and reporting" is meeting that goal. The "tax grab" from the consumer will work well!

This appears to be correct if the organization always incurs expenses that always have the full 12%/13%/15% HST (depending on the province).

But, I am afraid that this will often not be the case, and we still have an issue, as follows:

Many items are being exempt from the Provincial portion of the HST and only the 5% Federal portion applies.

For example, in Ontario the following are exempt from the Provincial portion:
- Books & magazines
- Diapers (think health centres and hospitals)
- Feminine hygiene products (think make-up & beauty schools)

Organizations will purchase these items and they will be charged only 5% tax.

I spoke with our accountants (here in Ontario) as well as the CRA, and they pointed out that organizations will have to break out the Federal & Provincial portions separately on the forms (Form GST66 will have to be replaced or redone by the CRA, I imagine).

If an organization sometimes pays 5% on Goods and at other times 13%, we really can't use the reallocation, can we?

So now what??

BTW - I finally found a valuable Tel # to CRA - a direct line for GST/HST Technical Enquiries 1-800-959-8287.

Samuel

Samuel:

We have the same HST exempt issues in BC but form 66 is for MUSH sector rebates. What does it have to do with this these 'at the till rebates by the retailer to the public'?

I don't think the government has given any thought to how Form 66 is going to work under the new rules. Hopefully they will publish an allocation formula so that we don'thave to deal with reaking out the HST into separate components when the vendors invoice is recorded.

Douglas:

You are correct that it is probably not relevant for the "till rebates".

However, I have a number of non-profit/school users that will have to calculate their rebates. And, I would love to see the form that they will have to submit, but...

I spoke with someone at CRA yesterday (at the phone number listed above), who directed me to the Form 66. I commented that it is not ready or usable for the provinces joining the HST July 1, to which he agreed but could not offer any further advice!

An accounting office that I work closely with advised me that most likely, BC, ON and all the other provinces will likely have to submit data in detail as to their rebate claim.

It would be great to see what they have to do, to make sure I set up the taxes/GL codes/etc accordingly.

Samuel

Looks like there may be an actual requirement to report the federal and provincial HST amounts separately.

Another Adagio dealer has worked out a solution to this which is going to be presented at the years Dealer's Adagoio Opportunity Conference Tips and Tricks session. Hopefully we will see you there.

There will still be plenty of time to implement the solution at your clients before July 1st.