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Earlier discussion

HST: What you should know Add to ...

YK: Will online buying/purchasing be affected by the HST?

Rod Butcher: Generally, only in so much as the rate you pay will increase if you are resident in Ontario or BC and are having goods shipped to either of those provinces. If you buy on-line from a Canadian supplier, the supplier should charge the appropriate tax.

henry wojak: Can we avoid the HST by cross border shopping or buying on line in Ontario?

Rod Butcher: The Canada Border Services Agency will be vigilant in enforcing observance of the personal duty free exemptions, and are authorized to collect both federal and provincial tax at the border, based on province of residence of the individual. Imports through the postal and courier streams are also included, so buying on-line from an unregistered supplier may not help.

Guest: Basic prices for goods vary greatly across a province, hence those who already pay more for goods, such as remote and rural communities, will pay more taxes. Have either Ontario or BC provided countermeasures?

Rod Butcher: Unfortunately, there has been no provision made yet for regional relief within a province.

Rick Sellens: Will the switch to HST eliminate the current sales tax on used cars, used boats, etc.?

Rod Butcher: Ontario plans to maintain an 8% tax on the private sale of automobiles (which will be paid to the MTO on registration of title change). Used vehicles - boats, cars, planes - will be subject to HST if purchased from a registered dealer.

Small business

Henry Christoff: How is the HST in BC suppose to help businesses- large or small?

Rod Butcher: The theory behind a value-added tax is that you can recover any tax charged to you by suppliers. Your costs then decrease (as you would no longer be paying unrecoverable BC SST - and nor will your suppliers), benefiting the business. In addition, you no longer have to deal with a second level of tax administration - one return, one audit, not two (or three if you are registered in Ontario as well).

Carla: I heard that with the implementation of the HST commission sales reps will no longer be able to use restaurant bills for tax purposes. Is that true?

Rod Butcher: Large businesses will generally be prevented from recovering the provincial portion of the GST/HST paid on entertainment expenses (including restaurant charges) for the first five years following implementation (followed by a 3-year phase-in). Your employer will not therefore be able to get that portion of the tax back.

Dominic: I run a small web development and consulting business. We currently add 5% GST to our service fees. We've always been told that for our services, we don't need to bill PST. With the change to the HST model, presumably we'll be charging the full 13% to our customers. Will there be a 'clawback' - so that we can get for the 8% we never charged before, or are those days over now? Is this one of the ways that the government will be collecting more money than it did previously (for services which formerly did not require PST)? Thanks

Rod Butcher: Yes, you would be charging the 13% on your fees after the implementation date. You will, however, be paying less tax on your non-resale purchases. Consumables, furniture, computers, software, telecomm charges, the tax on all these will be recoverable for a small business. Before, that would not have happened under the retail sales tax.

Sandy: I run a small services business, and charge GST to our customers on our services. How will this change with HST?

Rod Butcher: After the implementation date, you will be charging the HST rate - 12 or 13%, depending on the province, but you would be eligible to recover the HST you pay to other registrants on goods and services you purchase for the business.

Allan Coates: I own my own small business in Ontario and sell my writing services to other businesses, not consumers. Currently, I add 5% GST to my invoices. Under the HST, do I just increase the per centage to 13% or do I have to register separately with the provincial sales tax as well? If the latter is the case, the HST is not pro-business, as the politicians claim.

Rod Butcher: No separate registration is required, you simply commence charging the 13%, and recover on your periodic returns the tax you paid to other suppliers, just as you do for GST now.

Joseph: I am the owner of a general interest bookstore in Vancouver. Currently books are exempt from PST and my understanding is that exemption would continue under harmonization. My confusion is how this would work, the wording of the BC government's website implies there would be some sort of instant rebate applied to offset the PST portion of the HST at point of sale. Do you have any idea how this would work? Also, if I'm right in thinking books would be exempt, could I still expect to claim an itc on my PST portion of business purchases? (we do sell items that are not exempt from PST such as calendars and greeting cards). Thanks.

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