Tax registrations and exemption certificates

Two records sit beside your sales tax returns: where you are registered to collect tax, and the exemption certificates your customers give you when they buy without tax. Both are reached from buttons at the top of Manage Sales Tax.

In a Canadian company

The buttons at the top of Manage Sales Tax are Tax registration numbers, Where you owe, Use tax and Exemption certificates.

• Tax registration numbers opens Company ▸ Company Information. Your GST/HST number and your provincial (QST or PST) number are kept there, under Company identification, as in QuickBooks. Canada files one GST/HST return to the CRA however many provinces you sell into, so there is no registration per province to set up: GST/HST, QST and PST become separate returns through the tax accounts in Company ▸ Accounting Setup. See How sales tax works.
• Exemption certificates works as described below, by province: record the PST exemption number or certificate a customer gives you (for example a resale exemption in British Columbia, Saskatchewan or Manitoba), and see which untaxed sales a certificate covers. A customer who buys goods to resell is also marked Buys to resell — no PST on the customer record, so their sales carry GST only. See Tax on invoices, bills and expenses.
• Where you owe shows the GST/HST small supplier threshold and the provinces whose own sales tax you may have to register for. Use tax lists purchases with no provincial tax charged, which you may have to self-assess. See United States: nexus, use tax and marketplace sales for how both pages work.

In a US company the buttons are Registered states, Where you owe, Use tax, Exemption certificates and Marketplace tax. The next section is about US companies.

Registered states

Choose Registered states on Manage Sales Tax. The page Where you collect sales tax shows how many states are active, with the note that each state files its own return, on its own schedule, against its own account.

Until at least one state is registered there is nothing to file: No state is registered yet. Until one is, there is nothing to file…

Register a state

1. Choose Register a state.
2. Fill in the Register a state window:
   • State — pick it. Files as fills in with the state's name.
   • Files as — what appears on the return and in the filing history. Change it if you like.
   • Collected into — the account this state's tax collects into. It must be the state's own account: two states sharing one account cannot be filed separately, because nothing on a journal line records which state's tax it was.
   • How often it is filed — Monthly, Quarterly or Annual.
   • Permit or seller's number (optional).
   • Still collecting here — on for an active registration.
3. Choose Save.

Click a row to change a registration. To stop collecting in a state, turn Still collecting here off: it stops being offered for future returns, and everything already filed against it is kept. Registrations are closed, never deleted.

Messages: Choose the state.; Choose the account this state's tax collects into. It cannot be shared with another state…

Once registered, each state appears in the agency drop-down on Manage Sales Tax as a return of its own. Map each state's tax rates to that state's account in Accounting Setup so the tax lands there.

Exemption certificates

Choose Exemption certificates on Manage Sales Tax. The page has two views, switched with the button at the top.

Coverage report

The view it opens on: every sale in the period you charged no tax on, and whether a certificate covered it on the day. Choose the Period at the top (it opens on the last completed quarter).

• Exposed — the total of untaxed sales with no valid certificate that day, and how many. An exposure, not an amount owed.
• Covered — the total and count of untaxed sales a certificate did cover.
• Uncovered — each exposed sale: Date, Reference, Customer, State (Province in Canada), Amount. Get the certificate, or establish that the sale was not taxable.
• Counter sales with no customer — untaxed walk-in sales. Nobody can hold a certificate on a walk-in, so these are not certificate findings.
• Covered — each covered sale with Why it was covered.

Certificates on file

Certificates on file lists what you hold: Customer, Exemption, State (or multistate; in Canada Province, or all provinces), Number, Issued, Expires (or does not expire) and State of it (valid, lapsing soon, EXPIRED or revoked). An amber note warns when certificates have expired or will lapse within 60 days: sales to those customers after the expiry date are exposed until a renewal is on file.

Click a certificate to see it. Revoke… (after confirming Revoke this certificate?) stops it covering sales from today; it stays on file and goes on covering every sale made before today.

Record a certificate

1. Choose Record one.
2. Fill in Record a certificate:
   • Customer id — the customer's number in SeroBooks.
   • Which exemption is claimed — Resale, Manufacturing, Agricultural, Nonprofit or charitable organisation, Government body, Direct pay permit, or Other exemption. An auditor asks which exemption was claimed.
   • State code (Province code in Canada) — for example TX, or BC. Leave it blank for a Streamlined or MTC uniform form that covers many states, or in Canada for a claim good in every province.
   • Certificate or permit number (optional).
   • Issued and Expires — leave Expires empty (does not expire) for a blanket certificate the state allows without an expiry.
   • Note — where the paper actually is (optional).
3. Choose Record. If no customer is given: Which customer is this for?

Permissions

Registering states needs Configure Registrations & Nexus. Recording and revoking certificates needs Manage Exemption Certificates.

Related articles

• United States: nexus, use tax and marketplace sales
• Manage Sales Tax
• How sales tax works in SeroBooks
• Add or edit a customer