Taxes (and memberships)

Thanks Mark!  Appreciate you reaching out.

Here are my answers to the questions, but our scenario is slightly different as we are a National/Federal Museum, so the 'Provincial Tax' only applies to us in specific scenarios (not membership in our case).

1. Yes, in some cases it is both taxes, and these amounts vary from province to province (but federal tax stays the same).  In our case, we only charge the federal tax.  So 1 or 2 taxes.  If the plan is to run these as fees, I think it is important to think about how this displays on TNEW.  Right now, you can either group fees or not.  But if you don't, it seems  to split them out by line Item...and when you have tax on every line item, it gets really long.  It would be nice to be able to group them in different ways such as true fees combine, and then the different taxes combined.

2. There are some times that it is both, and sometimes just one or the other.  The rules change a little from province to province.

3. Not in our case, the tax rates are always the same...the variable is whether or not the Provincial or the National or Both taxes apply.

4. We have never had to apply the tax of a different province; however, again, we might not be the best use case for this as being a National Museum, things might be slightly different.  However, I think it would be rare to apply the tax from a different province in your own...

5. In our case, taxes are already setup as fees, and taxes across all products dump into the same accounts. So we have a single account for Federal tax (GST) and a single account for Provincial tax (PST).

6. We have always been selling memberships as products, so as far as I know, it is pretty straight forward with no wrinkles.  In our case though, we do have some memberships that are a membership that gets taxed normally PLUS a true donation that does not get taxed (ie: $125 membership taxable +$50 true donation (not taxable) for the total price of $175 where a portion is taxed, and a portion is not).  So something to keep in mind in terms of potentially having that double contribution going through...we would not want to be doing this in two transactions.

Feel free to reach out  if you have any other questions or if something isn't clear!

Hi Mark
Hope it's not too late to answer these questions.

At the Canadian Museum of Nature, we are a Federal institution with buildings in both Ontario and Quebec. We do not do memberships as a product but I think it would be good to answer the questions anyways. We sell memberships as a contribution but include the tax in the total of the contribution. We then back the tax out using a custom report for the financial reporting and deposits. Taxes are set up as fees in our system.

1. Yes, we have a national (federal) tax and a provincial tax that are applied to our memberships and other products.
2. In most cases both taxes are applied on all our products and memberships (donations excluded), however, if the cost of the ticket is $1 or less, there is no provincial tax applied. We also exempt the provincial tax to anyone who presents an Indian Status card.
3. We always use the same tax rate except in the cases mentioned above.
4.So far we have only sold via Tessitura in our Ontario location but this won't always be the case. If we start selling products in our Quebec location, the tax rates will be different. In Ontario the Federal tax (GST) is 5% and the Provincial tax is 8%, these are combined together to form the HST and is applied as a single tax at 13%. In Quebec you can either do a 2 step calculation, if your "cash register" calculates in 2 steps; GST 5% on the sale price, then provincial 9.975% on the sale price excluding GST. If the cash register calculates in one step then you use the combined rate of 14.975%. This can be rounded to 14.97% if three decimal places is not possible.
5. For us, so far, all our taxes are set up to report to the same GL even if they are different.
6. There is nothing else I can think of at the moment but we do have the same scenario that Derrek mentioned in his point 6.

Hope this helps

Cheers
Cindy

Hi Mark,

Thanks for reaching out!

The Calgary Zoo uses Memberships as products but we use them as revenue source and not as a contribution.  For a bit more information on our memberships: that are all sold individually even if they are part of a HH.  The HH doesn't have any memberships. We have a number of different levels of memberships that all include access to the zoo plus the higher levels include other benefits such as parking, additional discounts and free programs.  The membership is sold to which ever individuals within the household that the patron choses (i.e. 2 Adults, 1 Child, 1 Senior), each has it's own record/record ID - or can be an individual record.  Each of our members also get a membership card and our NScan is setup to scan each card with no interaction from the person scanning - scans and records 1 visit against the member including whether adult or child.

To answer the tax questions:

We are in Alberta and only have the federal GST tax (we have no provincial taxes) that are charged to memberships.  We charge the tax separately - it is presented to the customer as separate items. Our pricing is the price of the item/membership/ticket plus GST and are separate line items.  example:  Child membership is $34.95 which is presented to the customer and the GST tax is added as a separate line item/fee.

We currently do all our taxes for memberships, concessions & ticketing using fees.

We only apply the tax that is applicable for our province.

We don't have different rates but do have some items that are exempt from GST.  We have put them into different seasons and campaigns so can apply the rules accordingly.  We only have the one GL account code for our taxes but splitting them this way we would be able to put them to different GL account codes.  

The tax can be applied per item or per transaction - we have set it to per item as we often sell items, especially in concessions for an even amount (since we don't have pennies) - so for an ice cream we charge so that the total with GST will be $3.00.  The rounding if buying many items can cause issues.

What we can't accomplish right now is as a non profit organization we get a tax break on the GST so that we don't need to submit the full amount but just a portion (e.g. 40 60 split). What we would be helpful for our Finance department would be to be able to split off the portions to different GL account codes (one would be the GST tax account and the other would be the portion that would go to a revenue GL acccount code) but the customer would only see 1 line item / total labeled as GST.

Please feel free to reach out if you need any further info or any clarification

Thanks

Have a great day!

Brenda

Hi Mark, 

I asked our Finance team about this, here's the response:

HST is a combination of two sales tax (Federal portion 5%) and an Ontario portion of 8%. Every province will have different tax rates and subject to change as a result of provincial budget. For now, Alberta is the only province with no provincial sales tax (hence only 5% HST rates) QST is calculated based on good values plus Federal sales tax. All other province is simple combination of the two rates.

Charging HST based on location is somewhat complex. For performance hall, location of hall usually is correct. 

One GL bucket is usually good enough for tax collected in a particular province if the tax payer is not retailers or wholesaler.

I hope that helps.

Appreciate the effort to accommodate Canadian business needs around this topic. 

wes