Canadian GST PST

[Mark Johnson]

Derek Atkins wrote:

>No, it handles multiple taxes just fine.. You just need to enter
>them together into a single tax table.  So instead of setting up
>FOUR tax tables, you would set up TWO:
>
>  GST/PST Collected:
>
>  6% GST -> L:GST:Collected
>  7.5% PST -> L:PST:Collected
>
>  GST/PST Paid:
>
>  6% GST -> L:GST:Paid
>  7.5% PST -> L:PST:Paid
>
>Now, these numbers don't handle the fact that you have to pay tax on
>tax.   I don't recall which tax get's taxed, but the way to handle that
>is to increase the other tax to add the extra.  So, for example, let's
>assume you have a $100 bill that get's the 6% GST ($6) and then the 7.5%
>PST is on the $100 bill + $6 GST..  So 7.5% of $106 == $7.95.  E.g.,
>you can accomplish this by setting the PST to 7.95% instead of 7.5%.
>
>I'll note that 7.95 is also computed by taking PST * (1 + GST), e.g
>
>  NewPST = 7.5 * (1 + 6%)
>
>or
>
>  NewPSG = 7.5 * (1 + 0.06) == 7.95 (%)
>
>Voila, you've now got two tax tables that handle all your PST/GST.
>  
>
>
Doesn't this assume that all items have both taxes (or neither) applied? 

That is only the case in provinces where the provincial tax has been 
harmonized with the federal tax.  In other provinces, which items are 
taxed and are not taxed varies between the federal and provincial 
taxes.  Thereby, you need sometimes to apply the provincial rate to just 
the item and sometimes to the item plus GST.

Mark