This is the fourth in a series of articles about dealing with the implementation of the new HST on July 1, 2010. This article discusses what will change and what will stay the same on July 1.
The implementation of HST is remarkably similar for BC and Ontario, both provinces having cooperated with each other and the Federal government. There are a few differences between the provinces, but generally, anything that is taxable for GST remains taxable for HST and most goods or services that are exempt from GST are exempt from HST.
Both provinces seem to have taken the opportunity to remove PST exemptions from a number of items. There is a rather long list of goods and services showing the affect of the HST. Included in the list are many items that were formerly exempt from PST.
For BC see: http://hst.blog.gov.bc.ca/wp-content/uploads/2010/05/GST_PST_HST_List_v04.pdf
For Ontario see: http://www.rev.gov.on.ca/en/taxchange/taxable.html
Both provinces offer point of sale rebates for the provincial portion of the HST on certain items, most of which were exempt from PST.
(TABLE HERE)
NOTE: Electricity, natural gas, propane and other fuels are subject to HST in Ontario and BC, but BC will provide a provincially administered credit for energy – including electricity, natural gas, heating fuel, heat, steam, propane, kerosene, firewood and pellets – purchased for residential use. This credit will be applied directly on the utility bill, or can be claimed from the province if not on the bill.
As of June 16, 2010 it appears that Ontario First Nations members may have gained a point of sale rebate for the provincial portion of the HST in Ontario.
While the PST will be gone as of July 1st, provincial taxation on the sale of certain items will continue. Purchases of motor vehicles, boats and non turbine aircraft from private individuals will be subject to a 12% (in BC) or 13% (Ontario) provincial tax on registration of the transfer of ownership.
Provincial publications indicate that goods brought into BC or Ontario from a non participating province, or services provided in BC or Ontario will be subject to the 7% or 8% provincial portion of the HST.
The tax on some items actually will go down with the introduction of HST. The 8% BC Hotel Tax and the 10% BC Liquor tax will be replaced by the 7% provincial component of the HST. The $1.50 per day Passenger Vehicle Rental Tax will be eliminated in BC. Ontario sports event admissions and movie tickets will drop from 15% tax to 13%, and liquor taxes will drop from 15/17% to 13%.
In general, goods and services that are zero rated for GST remain zero rated for HST, most particularly, sales of basic foods, prescriptions, and medical devices, however, sales to the Province are no longer zero rated for HST. Vendors will charge HST to the Province, who will then recover the applicable portion of the HST from the federal government. Sales to Status Indians on reserve (or delivered to reserve) remain zero rated, as do exports.
Both BC and Ontario have announced HST credits to low income individuals and families, based on 2009 tax returns. These will be paid quarterly with the GST credit, starting in July of 2010.