Configuring Taxes for Canadian Sites/Zones

[blf]

thanks! I'll wait for your reply.
I tried adding an extra TAX CLASS called "GST only" and then created a new tax rate for "GST only" and set the tax rate at 5% GST (for SK buying books and audios) but when I tested it I get GST and GST so I deleted it for now.
Currently I have the following set up:

ZONE DEFINITIONS
Canada GST Zone GST (except Eastern Canada: NS, NB, NL)
Eastern Canada - HST Zone NS, NB, NL
Saskatchewan PST Zone PST (only when shipped to Saskatchewan)

TAX CLASSES
GST on Shipping
GST/HST/PST Class

TAX RATES:
GST on Shipping Eastern Canada - HST Zone 13%
GST on Shipping Saskatchewan PST Zone 5%
GST on Shipping Canada GST Zone 5%
GST/HST/PST Class Eastern Canada - HST Zone 13%
GST/HST/PST Class Canada GST Zone 5%
GST/HST/PST Class Saskatchewan PST Zone 5%

[blf]

Wondering if anyone can help me with the last thread...

[sn_tobin]

I really like your set up, but was wondering what do you set the priorities to for each tax rate??

[s_mack]

I really like your set up, but was wondering what do you set the priorities to for each tax rate??

priorities don't really apply in Canada because we don't tax taxes. So set them all to 1. Taxes are applied independently in this country. In some countries, you add one tax to the amount, and then another to that total amount (including the first tax).

Wondering if anyone can help me with the last thread...

I think you should have something like this:

ZONE DEFINITIONS
(yours are correct)

TAX CLASSES:
Shipping Tax
Taxable Goods
Books

TAX RATES:
Taxable Goods Canada GST Zone 5.00%
Taxable Goods BC PST Zone 7.00%
Taxable Goods Eastern Canada HST Zone 13.00%
Shipping Tax Canada GST Zone 5.00%
Shipping Tax BC PST Zone 7.00%
Shipping Tax Eastern Canada HST Zone 13.00%
Books Canada GST Zone 5.00%
Books BC PST Zone 0.00%
Books Eastern Canada HST Zone 13.00%

In other words, I think you need to add a "Books" class (and then define rates for it). Then, in your products setup pages make sure you choose the correct tax class! Books get the "Books" class and your courses get "taxable goods" class.

I think that's right... again, I wish Dr.B could confirm as he knows the system way better it seems.

- Steven

[indicana]

Hi,

The above tax calculation of GST and PST for Ontario is not done the right way. The GST is first added to the cost and then the PST is added to the cost +GST. In the calculation shown below:

Shipping to Ontario:

Sub-Total: $69.00
Per Item (Best Way): $10.00
8.0% PST (Ontario) + 5.0% GST #99999 9999 RT0001: $8.97
5.0% GST (shipping) + 8.0% PST (shipping): $ 1.30
Total: $89.27

the tax is taken as 5% of $69.00 = $3.45 + 5% of $69.00= $5.52 which is equal to $8.97 which is not the right tax calculation as done in Canada. It should be 5% of $69.00 =$72.45(69+3.45) + 8% of 72.45= $78.24(72.45+5.79)
Tax on shipping would be 10+5% + 8%=11.34
The total would be 78.24+11.34=89.58.

Indicana

[s_mack]

You are 100% incorrect Indicana. Check with an accountant.

We do NOT tax taxes in (most of*) Canada! The 5% and 8% are calculated independently, not compounded as you have it. You have been (illegally) ripping off your customers if that's the way you've been doing it.

If you don't believe me, then check with an accountant or your local tax office. Or just check any receipt you've ever gotten from any company that's likely to do it correctly.

* There are a couple exceptions. Quebec goes back an forth on this over the decades... I'm not sure what they're at right now. Seems to me PEI compounds their sales tax. Ontario DOES NOT!

[s_mack]

Here's a source: http://en.wikipedia.org/wiki/Sales_taxes_in_Canada

As you can see, only Quebec and PEI compound taxes. The rest are calculated independently.

Granted, that's wikipedia and not an official source. And I'm the first to acknowledge that wikipedia is a terrible source if you need to be SURE its right, but in this case I know it is :)

- Steven

[indicana]

You are 100% incorrect Indicana. Check with an accountant.

We do NOT tax taxes in (most of*) Canada! The 5% and 8% are calculated independently, not compounded as you have it. You have been (illegally) ripping off your customers if that's the way you've been doing it.

If you don't believe me, then check with an accountant or your local tax office. Or just check any receipt you've ever gotten from any company that's likely to do it correctly.

* There are a couple exceptions. Quebec goes back an forth on this over the decades... I'm not sure what they're at right now. Seems to me PEI compounds their sales tax. Ontario DOES NOT!

You are right. I just checked with Revenue Canada and they confirmed that you cannot collect tax on tax. Anyway as I am just starting my online sales I haven't ripped off any of my customers. Thanks anyways for the correction.

[Winks]

Hi Zenners,

I followed the Canadian Taxes tutorial to the letter but I've encounter problems I can't sort.

There seems to be a problem trying to get the prices to show correctly once I activate the GST/HSTPST tax class on a product. This is what I'm getting:

Products price (net) $1.5873
Products price (gross) $2.00

This isn't correct. I want the gross to be show as $2 with the GST included to this figure. But 1.5873 plus the GST doesn't make $2.00. Whats going on?

Cheers in advance!

[Winks]

Hello Zenners,

It's me again. I'm in the process of configuring the GST etc using the very thorough tutorial but I'm a bit confused on the "Leave PRIORITY at "1" for a non-cumulative tax (i.e. Ontario)" issue. My business is based in Red Deer, Alberta. Do I use Priorty as '1' or not?

Any help would be appreciated!