It’s now official: both Queen’s Park and Ottawa passed legislation regarding the harmonized sales tax (HST). The new measure will come into force in summer 2010 in Ontario.
The HST will blend the Goods and Services Tax (GST) and the retail sales tax (RST) on all goods and services that are subject to the GST. Until now, the GST and the RST are governed under different pieces of legislation; the GST under the Excise Tax Act,* the RST under the Retail Sales Act.^
Because of the different regimes, items that are subject to the GST may not be subject to the RST. For example, books and legal services are GST-taxable but are exempted under the RST.
After the two taxes become blended into the HST, all GST-taxable items become HST-taxable. Many items and most services currently exempted under the RST will soon become taxable under the HST regime. Unfortunately, it means the prices of books and legal services will jump 8%.
A piece of good news: some old exemptions on RST remain in place. Newspapers and meals under $4 are not subject to the new HST.
