Since my posting on the HST (“HST to Become Reality for Ontarians,” December 10, 2009), I have received several inquiries regarding the upcoming HST. In response I’ve decided that I’ll post bulletins on new HST developments.
Ontario’s HST, or Harmonized Sales Tax, will blend the Goods and Services Tax (GST) and the Provincial Retail Sales Tax (PST) into one 13% tax at the conclusion of most sales of goods and services. Many goods and services that are currently not PST-taxable will become HST-taxable. As a result, consumers may be facing a little buyer’s remorse at checkout counters after the HST comes into effect.
One way of dodging the HST tax jump is to purchase in bulk goods and services not PST-taxable prior to the launch day for the new tax in Ontario, currently scheduled for July 1, 2010. As you may have guessed, such items are few and far in between. I’ve identified several of them below:
- Pre-paid funerals
- Pre-paid advertising
- Stamps
- Books
- Magazine subscriptions
Items that are exempted from the GST, such as produce and most other groceries, remain exempted from the HST.
Unfortunately, the GST/HST will be applied to professional services, such as accounting and legal services, when the accounts are rendered.
For example, a lawyer’s invoice issued the day before the HST commencement day will bear the 5% GST, while an invoice issued on or after that day will include the 13% HST.
Perhaps it’s a good time to resolve your accounting or legal issues and have the accounts rendered before the HST comes into effect.
Note: Please keep in mind that this article is provided for information and educational purposes. It does not constitute legal advice and should not be regarded as such. The law may have changed since the publication of the article.
PSWLaw assists clients on tax law issues.
