QuickBooks Quik Tip on Sales Tax Problems

Posted by on Sep 8, 2011 in Sales Tax | 19 comments

If you are a company that has not been entering in the correct Sales Tax information into QuickBooks, to do with your Sales Tax codes, names and Tax Items, chances are you have created a number of  unassigned Sales Tax Amounts.

Why should you be concerned? Well, if you proceed to use the Files Sales Tax feature in QuickBooks, you will receive the error message as displayed on the left.

This message reads “Your sales tax return is NOT ready to file.” It also states below that “Amount not assigned a line on your tax return.”

So how does error occur and where abouts did it happen?

This error could have been caused by a journal entry, during a Write Cheques, Bill Entry function or even to a deposit, in which the Receiver General (name), GST/HST Payable (tax item) or a Tax Code – HST (BC) on purchases, was never entered or used incorrectly. Without this information QuickBooks does not understand where you want this amount to be directed to.

Think of it as you being asked for specific directions and you just say “go straight ahead.” How would one ever find that location if it is a specific address around the corner after going three blocks ahead?

To locate these errors you would have to print a report which will display these. To do this go to the Menu Bar/Reports/Sales Tax/Unassigned Sales Tax Amounts Detailed Report. 

What has happened in this Bill entry (above), is that this person has used a line and entered the GST/HST Payable as the account, instead of clicking on the Tax column and choosing a Tax Code. Notice at the bottom right hand corner that there are no amounts in the tax fields.

This has now caused an unassigned tax amount to the tax paid (Input Tax Credit) on this entry.

This next error on the right displays a journal entry, in which there is no Tax Item shown on the GST Payable Account line.

How you correct that would be to click on the drop-down box in the Tax Item column, and choose the appropriate Tax Item for this purchase. In this case it would be the GST/HST (BC) (ITC) code which is the GST/HST (BC) on purchases (Input Tax Credit) item.

After all the corrections have been completed, you would run the Unassigned Sales Tax Amounts Detailed Report, and it should say that there are no unassigned amounts.

Glad to have solved your problem – from quickbookstrained.i.am.

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19 Responses to “QuickBooks Quik Tip on Sales Tax Problems”

  1. I have truly decimated my tax files to the point wherein I can no longer make sense of any or most of the entries, “unassigned sales tax amounts” when I tried to follow the instructions on how to ‘correct’ the problem,it made no difference and did not allow me to gain access to the file??

    • Larry Johnson says:

      Gordon, do a search of my blogs, because there is a complete write up of where to find the report and how to correct your problem. Hint: It is usually because a general journal entry has been made and the tax code is missing on that line.

  2. Yes works for a few entries, but I started with quicken and then exported into QuickBooks. This feature was only available the last few years and I have thousand of entries to fix if I want to zero out my unassigned sales tax amounts.

    Isn’t there a way to do this with a general journal entry instead? Which accounts do I debit/credit for this do go away???

    • Larry Johnson says:

      Denis, this is too complicated for me to discuss in a few sentences. My suggestion would be to contact a QB ProAdvisor in your area, pay the few hours of consulting fee, and get that resolved. Otherwise that error message will continue and trying to fix it by yourself will drive you nuts.

      The whole problem is based around a tax code attached to a tax item. It could be the GST collected or GST paid (Input Tax Credit). This code/item was never done either in a general journal entry or in any of the other areas that the tax code was needed, i.e. Invoice, Write Cheques, Enter Bills, Credit Card entry, etc.

  3. Hossein says:

    When I write a check, using the ITEM tab, the item for HST instalment doesn’t show up even though I can see it on the ITEM list! Can you tell me what is wrong?

    • Sorry Hossein, you haven’t given me enough information to answer your question. Like, what version(Desktop, Online, EasyStart, Pro, Premier, Enterprise) and year you are using, Vendor name, have you checked off the Sales code box (don’t).

      • Hundalei says:

        I’m having the same exact problem. Using QB Premiere 2014. I write a cheque for my HST installment, and QB help tells me when writing the cheque to go into the “items tab” and select my HST installment item. Only the HST installmet item does not appear as an item to be selected even though it is in my items list.

        • You need to make the payment through a General Journal entry. Bank will be your Credit side and GST/HST Payable will be your Debit side. On the line of your GST/HST Payable account, Receiver General will appear as the name, and then you can select in the Tax Item column – HST Installments. Hope this helps.

  4. hi Larry,

    I am using 2013 Pro.
    In report “Profit and Loss”, Bade Debt, Warranty claim are not deducted from annual sales.
    But in “Sales Tax Agent Report”, they are deducted.
    Bad debt is in “expense” account.
    I set Warranty in “purchase return” account under COGS. is it correct?

    So my accountant found, the annual sales in 2 reports are different.
    When filing GST and when filing year end, it is a trouble.

    Thanks a lot for your help.


  5. I have an issue with GST/HST for a client. We have finally managed to correct the sales tax report to correct balances but now QB indicates that there is a payable owing to the CRA. Have you come across a way to correct this – seems we fix one part only for the other side to go offside.

    • Hi Ana, this would be tough one to comment on because I am not privy to viewing your company file. But my first question would be to you, are you using the QB’s Sales Tax/File Sales Tax function? If you are then, it will create a payable to the Receiver General. Also, how did you make the correction to the balances? Did you use the QB’s Sales Tax/Sales Tax Adjustment? If so, what account did you use as the Adjustment Account?
      My suggestion is that you contact a ProAdvisor to guide you through this, because if it was done incorrectly – you will creating a real problem. Hope this helps.

  6. Your information helped me but what about when you collect GST – I tried doing a deposit and can’t get the GST amount on the deposit to show on my report.

    • Hi Juli, you need to give me information about what you mean by “collect GST”.

    • I not only pay GST on purchases, I collect GST on Commissions. I need to be able to show the GST collected on my return and it isn’t showing on my sales tax return.

      • Hi Juli, you need to perform a number of steps starting with the Item List. Under List/Item List/ create a new Item called Commissions and the type will be Sales Tax Item. Follow the steps in each field and complete the info required. After that you will need to set up a new Sales Tax Code under List/Sales Tax Code List. Make sure the info matches your set up in the Item called Commissions.
        At the top of the screen in the Menu Bar, go to Sales Tax/Manage Sales Tax and make sure those codes match the province and rest of info that is required there.
        Hope this helps.

  7. I have taken over books from someone else and have about 20 deposits where the sales tax shows as unassigned – how do I assign the sales tax – this is a years worth of books and the bank was reconciled every month – and now I need to file correct sales tax

    • Hi Denise, re-read the blog on QuickBooks Quik Tip on Sales Tax Problems as it explains what report to print and how to fix this problem. Quick question – what are the deposits for in regards to sales tax and what type of industry do you work in? If you have deposits re sales tax that would indicate to me that those are refunds, and that your industry does not have A/R, but only has Vendors/Payables which would account for an Input Tax Credit (deposits). You also need to use File Sales Tax which is located on the Menu Bar. Once again if you are stuck, your local QB ProAdvisor should be able to help you. Cheers!

  8. Gladison says:

    Hi everyone does anyone know how to record purchase VAT in accountant 2013

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