Sales tax: US state tax and Canadian GST/HST, from setup to payment
Setting up rates, taxable items and customers, what prints on the invoice, the liability report, and paying the agency.
6 min read · Updated 2026-10-09
Set up rates
Lists → Sales Tax Rates. Create one rate per tax you collect, with its percentage and the liability account it accrues to. AcboBooks creates a Sales Tax Payable account by default; most businesses keep one liability account per agency. Examples: CA state 7.25%, GST 5%, HST 13%. Set one rate as the default; it is pre-selected on new invoice lines.
What gets taxed
Tax applies per invoice line, so you have full control. A line is taxed at the rate shown in its tax column; pick a different rate for that line, or none, from the drop-down. For a customer that is exempt, such as a reseller or a non-profit, clear the rate on their lines and record their exemption number in the customer's notes.
On the invoice
The printed invoice shows the subtotal, each tax as its own line with its rate, and the total. Canadian invoices need your registration number on them: put it in the footer text under Company → Form Templates (for example, GST/HST No. 123456789 RT0001).
The liability report
Reports → Sales Tax Liability for any period shows, per rate, the taxable sales, the non-taxable sales and the tax collected, plus what has been paid and what is still owed. It is laid out to transfer straight onto the return. Run it for the filing period before you pay.
Pay the agency
Vendors → Pay Sales Tax. Pick the period and the bank account; it shows the amount owed per rate and records the payment against the liability account, so the balance falls to zero for the period. Do not write an ordinary cheque to the tax agency posted to an expense account; that would charge your profit twice, since the tax was never your income.
Canadian notes
- GST and HST are each a rate; a province with HST uses one combined rate. For provinces with a separate PST or QST, create a second rate and apply both to the line.
- Input tax credits: the GST/HST you pay on purchases is recoverable. Enter it as a separate line on the bill posted to a GST/HST paid (receivable) account, and net it against the collected amount on the return. The liability report shows the collected side; the paid side is the balance of that account for the period.
- Multi-currency: tax on a USD invoice from a Canadian company is still remitted in CAD at the document's exchange rate, which AcboBooks records per invoice. See Lists → Exchange Rates.
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