HST Charitable Organization

by Maria

Could you explain how to make the journal entry for a charitable organization (which is eligible for a Public Service Body rebate) on their purchase?

Example: paying advertisement $100, HST $13. Thanks a lot.

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Hi Maria,

This site was developed to help sole proprietors do their own books. I haven't worked with the PSB rebates but here's my best guess:

According to the CRA website article on Public Service Bodies' Rebates at http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/rbts/psb/menu-eng.html, charitable organizations are eligible for a 50% rebate of the federal portion of HST. Ontario charities can claim a rebate of 82% on the provincial portion.

Therefore I would book my entry as follows:

Dr Advertising expense $100
Dr Non rebatable sales tax $2.50 (for federal portion of HST)
Dr Non rebatable sales tax $1.44 (for provincial portion of HST)
Dr GST/HST Payable $2.50 + $6.56 = $9.06 (rebatable portion of HST)
Cr Cash in Bank $113.00

where Non refundable sales tax is an expense account on your income statement.

P.S. I would like to remind you there is a difference between information and advice. The general information provided in this post or on my site should not be construed as advice. You should not act or rely on this information without engaging professional advice specific to your situation prior to using this site content for any reason whatsoever.

Comments for HST Charitable Organization

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Apr 07, 2011
by: Anonymous

"...where Non refundable sales tax is an expense account on your income statement".

Should it go under Advertising expense or Tax expense? Thanks a lot.

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Just make it a regular stand alone expense account. I like to position it towards the end of my expense accounts.

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