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HST tips for you & your business

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In this already busy tax season, it is hard to believe that the Ontario new unified tax system, Harmonized Sales Tax (HST) is just around the corner. On July 1st, 2010 the HST will replace the Ontario Retail Sales Tax (RST) and combine with the federal Goods and Services Tax (GST).

Business Invoicing Requirements
The provincial portion of the HST will be 8% and the federal portion will be 5%, for a combined HST rate of 13%.

GST/HST registrants will need to let customers know if HST is being applied to their purchases.

The disclosure and invoicing requirements for the HST for Ontario will follow the existing rules for the GST/HST.

The Canada Revenue Agency has a number of publications that discuss disclosure and invoicing requirements. Please visit the Canada Revenue Agency’s website at cra-arc.gc.ca.

These publications include:

  • GST/HST Memoranda Series 15.1: General Requirements for Books and Records
  • RC4022 General Information for GST/HST Registrants
  • GST/HST Memoranda Series 13.4: Rebates for Printed Books, Audio Recordings of Printed Books, and Printed Versions of Religious Scriptures

For more information on the introduction of the HST in Ontario:

  • ontario.ca/taxchange
  • cra.gc.ca/harmonization
  • Ontario Budget hotline 1-800-337-7222 or 1-800-263-7776 for teletypewriter (TTY)
  • Canada Revenue Agency 1-800-959-5525

Rebates & exemptions for consumers
The HST will not be charged on the following items that are currently not subject to PST:

  • Basic groceries
  • Prescription drugs
  • Certain medical devices
  • Child care
  • Residential rents
  • Municipal public transit
  • Most health and education services
  • Legal aid
  • Most financial services
  • Tutoring
  • Music lessons

Consumers will not have to pay the provincial portion of the HST for:

  • Qualifying prepared food and beverages sold for $4 or less
  • Print newspapers
  • Children’s clothing and footwear
  • Children’s car seats and car booster seats
  • Diapers
  • Feminine hygiene products
  • Books (including audio books)
  • 83% of consumer purchases already are subject to 13% sales tax.
  • Buyers of new homes will receive a rebate of up to $24,000 regardless of the price of the new home.
  • Buyers of new residential rental properties will receive a similar rebate
  • The HST will not apply to purchases of resale homes.