Get up to date on what you need to do about the transition to HST

Harmonizing local business with tax

Susan Bussieres, senior resource officer from Canada Revenue Agency (CRA) recently held a meeting in Burns Lake in order to present information to local business owners about the proposed Harmonized Sales Tax (HST).

In B.C. the HST would be taxed at a rate of 12 per cent, and in Ontario it will be 13% consisting of seven and eight per cent federal taxes and five per cent provincial taxes.

The HST is planned to be implemented in B.C. and Ont. on July 1 2010.

According to the CRA, the HST once introduced, would apply to most transactions that become due, or are paid without having become due on or after July 1, 2010.

The HST would also apply to any memberships that become due or are paid on or after July 1, 2010, however CRA notes that HST would not apply to the transaction if more than 90 per cent of the membership period is before July 2010.

For example, selling year long memberships; On Jan. 2 2010 a yearly gym membership is sold which will expire on December 21, 2010. The HST will not apply to the sale of this membership because the membership fee becomes due before May 2010.

But continuous services such as cellular phone services, natural gas and cable television services will be subject to the proposed HST.

HST could also possibly apply to returns and exchanges purchased before the HST comes into effect but returned after the introduction of the HST.

Generally the HST will apply to the sale of goods when the goods are delivered and when ownership of the goods is transferred to the purchaser on or after July 1, 2010.

Zero rated taxable supplies [goods that do not attract HST] include prescription drugs, medical devices, basic groceries, some agriculture and fishing supplies and exports.

According to the CRA point of sale rebates for the provincial part of the HST (seven/eight per cent) would be introduced for children’s clothing and footwear, children’s car seats and booster seats, children’s diapers, books, including audio books, feminine hygiene products and motor fuel. [The retailer would automatically provide the purchaser with a point of sale rebate by only collecting only the five per cent federal component as they do now].

For further information about the HST go to www.cra.gc.ca/harmonization-

HST has a potential for a lot of tax problems, to ensure you stay on the right side of the line, learn about LazyBooks, audit ready bookkeeping system.

For more information on audit ready accounting go to http://taxauditsolutions.ca

This entry was posted on February 10, 2010 at 1:34 pm and is filed under HST Into, Tax Topics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.

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