In this article:
Note: Our Customer Success team is available to answer any questions surrounding available reports, but are unable to provide extensive tax advice. Questions relating to how your taxes should be filed should be directed to a tax professional.
While we are unable to provide extensive tax advice to our practitioners, we want to do our best to ease the stress come tax season as much as possible. This article will guide you through where to find reportable figures required for your tax obligations as well as how these figures are calculated.
Accessing Your Financial Reports
To assist in your financial record keeping, financial reports calculating gross sales, cost of sales, and net income can be downloaded from your account. These downloads are available in your Reports page, available after your first payout.
Navigating to Reports in your dispensary.
Reporting Your Income
A summary of values required for tax purposes can be accessed quickly from the Account Activity and Balance Report by selecting the desired reporting year from the drop-down menu shown below. These values can be used confidently to fulfill your tax requirements.
Account Activity and Balance Report summary for the 2019 tax year.
Calculating Gross Sales, Cost of Goods, and Net Income
The amounts in the Account Activity and Balance Report, as shown above, are calculated for you to facilitate the process of reporting your taxes to the CRA. The example below will walk you through how the report can be used to calculate these values on your own if needed.
Step 1: Downloading the Account Activity and Balance Report.
From Reports, locate the Account Activity and Balance Report, select the current year and Download as CSV or Excel file. In our example below, we will be looking into the 2016 tax year.
Sample CSV export of Account Activity and Balance Report.
|Transaction Number||The shipment ID.|
|Transaction Type||Type of record displayed. i.e. payout, refund, or shipment.|
|Transaction Status||The record's status. i.e. amounts paid (payouts), shipped (orders), or received (refunds).|
|Order Number||Fullscript order number.|
|Transaction Date||The date the order was placed.|
|MSRP Total||Total MSRP (manufacturer suggested retail price) in the shipment.|
|Sales Total||Represents the total retail cost, and is calculated as the MSRP total less the patient discount.|
|Patient Discount||The discount amount applied to the order, or patient savings.|
|COGS Total||The fee earned by Fullscript representing product cost and fees associated with administering the transaction. Referred to as cost of sales or cost of goods sold (COGS).|
|Amount||Represents net earnings from the transaction, and is calculated as sales total less COGS total.|
|Balance||Running balance of funds available for payout.|
Step 2: Calculating Gross Sales.
Gross sales represent the total retail value of orders transacted. For this, we sum up the values in the sales_total column. In this example, we see a total of $1,635.16.
Step 3: Calculating Cost of Sales.
Cost of Sales represents the cost your practice incurred to complete the sale. For this, we sum up the values in the cogs_total column. In this example, we see a total of $1,519.99.
Step 4: Calculating Net Income.
Net Income represents the total of the earnings payable to your business by Fullscript in the form of payouts. To calculate Net Income for the year, we deduct the Cost of Sales (Value B) from Gross Sales (Value A). In this example, we find a Net Income of $115.17.
Sample CSV Export of Account Activity and Balance Report with Gross Sales, Cost of Sales, and Net Income calculated.
Fullscript maintains 100% responsibility for the collection and remittance of retail tax in all provinces of Canada (HST/GST/PST/QST).
Additionally, Fullscript pays passthrough tax to our practitioners when provided a GST/HST registration number as the CRA deems the transfer of profit margin to be a separate and taxable event. If you are registered to collect GST/HST, you have a responsibility to provide your registration number to Fullscript and ensure the appropriate taxes are included in your payouts.
In the past, we used the province of a store’s financial address to determine whether GST or HST was applicable, as well as the respective tax rate.
As we are constantly working to improve and maintain tax compliance, we have been advised by the CRA that, as practitioners are providing Fullscript with the service of their patients, the passthrough tax rate should be based on Fullscript’s location.
Therefore, store owners that provide us with their business/registration number will see taxes included in their payouts at a rate of 13% (Ontario HST).
Registered to Collect GST/HST?
Given that Fullscript sits at the center of transaction administration, we have taken it upon ourselves to help you stay compliant. By providing us with your business number, as shown below, our system will know that you require us to pay taxes on these transfers as if you were invoicing us. Simply remit these proceeds to the CRA through your regular GST/HST filing process.
Enter your GST/HST registration number within Dispensary Settings on the Dispensary Info page and opt-in to include taxes (13%) on future payouts.
Enter your GST/HST registration number on the Dispensary Info page to collect GST/HST on future payouts.
Tip! Check out the CRA's website for more information on GST/HST eligibility and how to register.
The business relationship between Fullscript and your account does not require us to send any statutory CRA forms. However, the above guide will assist you in determining your annual earnings.
You may request a T4A for your records if the dispensary has received a minimum of $500 in payouts for the tax year. Generated T4A's are for illustrative purposes only. Please contact firstname.lastname@example.org if you wish to receive a PDF copy.
Tip! The amount that would appear in box 048 of the T4A - "Fees for services - Honoraires ou autres sommes pour services rendus" is the sum of all payouts for the tax year not including HST payments. This amount can be calculated using the Account Activity and Balance Report from Reports.
Frequently Asked Questions
What do I need to share with my tax professional to complete my taxes?
✔ Account Activity & Balance Report (for the appropriate tax year)
✔ The HST amounts paid by Fullscript (if GST/HST is collected)
Tip! When registered to collect GST/HST from Fullscript, taxes paid are located at the bottom of individual payouts from the Reports page.
Why is the Sales tax paid to practitioners on payouts a different rate than the sales tax paid by customers?
One of the main factors in determining sales tax is the address of the purchaser (more specifically: ship to Address). In short, the payout made to the practitioner is a separate transaction between Fullscript and the practitioner that also requires sales tax to be added. However, since this is a transaction from the practitioner to Fullscript, the destination billing address is our Ontario address.
How do I remit my HST proceeds to the CRA?
HST amounts paid by Fullscript to your dispensary can be calculated from the Account Activity & Balance Report by downloading the report for the appropriate tax year, filtering for HST transaction types, and adding them together. HST can also be displayed under the 'Summary' heading in individual Payout Reports found in your Reports if you have provided Fullscript with your GST/HST registration number.
Note: If you are registered to collect GST/HST, you have a responsibility to provide your registration number to Fullscript and ensure the appropriate taxes are included in your payouts.
Do I need to provide Fullscript with a GST/HST number?
This is not a requirement to use Fullscript; however, it is the responsibility of the practitioner account holder to ensure they meet the thresholds and requirements needed to register for GST/HST should they choose to.