Most Common HST Questions
What does HST stand for?
In Canada, HST stands for Harmonized Sales Tax. The word harmonized is used to describe the merging or blending of two or more taxes. In this case, GST & PST are being “harmonized” into a single sales tax called HST.
What is Harmonized Sales Tax?
Harmonized Sales Tax is a new sales tax that is the result of merging the provincial sales tax (PST) & the goods and services tax (GST) in Ontario. The combined tax is called the Harmonized Sales Tax.
HST will replace PST & GST in Ontario during the summer of 2010.
How much is HST? What is the HST tax rate in Ontario?
Prior to the HST launch, sales tax in Ontario is charged at 5% for GST and 8% for PST. Once merged the new HST rate will be 13%.
In many cases the taxes charged on goods and services will not change. However, some items or services presently exempt of PST / RST will see an increase to the full 13%.
When is HST coming to Ontario?
HST is coming to Ontario on July 1st 2010. HST was first announced for Ontario in the 2009 Ontario Budget. When the Ontario HST begins on July 1st 2010 it will also launch in British Columbia, Canada.
Why is Ontario getting HST?
The Ontario government proposed HST as a means of updating the Provinces “aged” tax system. The proposal suggests that a more modern tax structure will benefit Ontario businesses and individuals in the long run.
The new Ontario sales tax is designed to reduce what many call the hidden costs of PST. These cost, which are cascaded down from production to retail, often increase the costs of many goods and services.
The Ontario government also claims that HST will lower the price of many goods and services and eventually lead to more jobs in Ontario.
No matter the end result, one thing is for certain: HST will change the tax landscape in Ontario. Depending on whom you ask, HST will either cost the people of Ontario more money or help them save money.
There are many opinions about HST and why it’s being implemented in Ontario. For more information on HST in Ontario, HST history and what HST means for you – see HST Debate .
Is HST in addition to GST and PST?
No, HST is not an additional tax. HST is replacing GST & PST.
What provinces in Canada use HST?
Ontario is not the first Canadian province to get HST. In 1997 Nova Scotia, Newfoundland and New Brunswick each adopted HST.
On July 1 2010 when HST begins in Ontario it will also launch in British Columbia.
Will HST affect my credit score or ability to get credit?
No. HST is a sales tax and while it may indirectly affect your credit rating by increasing how much you spend on certain items or services in Canada, it will not affect your credit. If you’re looking for more information on consumer credit or want to know what does have an impact on your credit
history in Canada, visit Check Your Credit First Canada .
Who does HST affect?
In one way or another HST will affect almost every consumer and business operating in Ontario.
Will HST increase the price of goods and services?
HST will increase the tax on many items and services. The actual price of goods and services will likely remain the same.
According to the Ontario Ministry of Revenue 83% of consumer purchases will not receive a new tax.
What items will cost more because of HST?
HST will be applied to many items that were previously taxed GST only. The goods and services that will see a tax increase are those not previously subject to PST.
Here is a short list of items that will receive an HST tax increase:
- Tobacco and tobacco replacement products are subject to HST
- Gasoline and diesel will be taxed HST
- Hairstyling / hair cuts are subject to HST
- Legal services will be taxed HST
- HST will be applied to internet access in Ontario
For a more detailed list of goods and services subject to HST check out Items Subject to HST and Services Subject to HST .
What items are exempt from HST in Ontario?
While HST will increase the tax cost on many items and services in Ontario, there are still some items exempt from HST.
Here are a few examples of HST exemptions, which are also known as point of sale rebates:
- Children’s clothing & shoes up to designated sizes
- Feminine products
- Books (some books)
- Some print newspapers containing news information of interest to the public (not including magazines, flyers and shoppers)
- Prepared food and beverages priced $4.00 or less are exempt from HST (foods must be ready for immediate consumer)
- New homes under $400,000
For more details on exemptions check our list of Ontario HST Exemptions .
What is HSTOntario.com?
HSTOntario.com is a made in Canada web site dedicated to sharing news and information on the upcoming HST tax. HST Ontario is not affiliated with the Canadian government and is a fully independent and unbiased source of HST information.
HST Ontario and its authors do not endorse or protest HST in any province. While the individuals contributing to HSTOntario.com may have independent opinions regarding tax reform their job is solely to report news and share information in a non-partisan way.
Please see About HST Ontario for more information on HST Ontario.
How will HST affect my business?
The Ontario Harmonized Sales Tax could impact your business in several ways. For instance the way you charge tax and the taxes you pay on many goods and service will change.
If you have specific questions about HST and your business, please contact a professional tax consultant, the CRA or visit an official Ontario government website.
Where can I get more HST information?
For more information about HST you can try visiting ontario.ca/taxchange or cra.gc.ca/harmonization. For more specific information on Canadian tax reform try contacting a qualified tax professional.Source: hstontario.com