The way British Columbia and Ontario collect sales taxes will change July 1 2010 regardless of a mounting protest by provincial activists trying to repeal a new harmonized sales tax, or HST.


Brands doing business in Canada should be aware that Canada has both a provincial sale tax (PST) that varies from province to province, and a federal goods and service tax (GST), says A52 Warehouse Inc. in Surrey, B.C. Up until now most of the provinces in Canada have been administering these taxes separately. Provincial governments collected and administered the PST, and the federal government collected and administered the GST.


But beginning July 1, the governments of British Columbia and Ontario  will combine the PST and the GST into one blended tax called the HST. In British Columbia, the HST will be a combination of a 7% PST provincial rate and the 5% GST federal rate for a combined rate of 12% HST.


The blended tax means consumers in British Columbia will pay significantly higher sales taxes on real estate and many services, including gym and golf club memberships that were previously exempted from the PST. This has spurred on anti-HST activists, who are racing to collect enough signatures by July 5 to force a referendum on the tax or compell the provincial government to repeal it. Taxes on most sporting goods, including sleeping bags, tents, camping gear and team sports gear remain at 12%, but the sales tax on bicycles will jump from 5% to 12%.

 

The B.C. HST would be administered by the federal government in the same way that they now administer the GST and the HST in other HST provinces.

 

A52 Warehouse said brands should be aware fo the following key changes:


  • HST is applicable on everything that was GST applicable.
  • You must remit the percent tax relevant to the province (either the variable HST rate or the flat GST rate) that the goods are sold in, which means you must collect the percent tax from your retailers for that province. If it is an HST province you must remit the HST amount. If it’s a GST province you must just remit the GST amount.
  • If you are registered with a GST number you are also registered for HST.
  • You must remit the HST as you remitted the GST to the Government of Canada.

Below is a chart of sales taxes collected in each Canadian province provided by A52 Warehouse Inc. For more information on British Columbia's new HST, visit http://hst.blog.gov.bc.ca/.

Province of
Delivery		GSTPSTHSTCharge and
Remit		Province of
Delivery		GSTPSTHSTCharge and
Remit
Alberta5%   Nunavut5%  5%
British
Columbia		  12% Ontario  13%13%
Manitoba5%7%  Prince Edward
Island		5%10% 5%
New
Brunswick		  13% Quebec5%7.5% 5%
Newfoundland  13% Saskatchewan5%5% 5%
Northwest
Territories		5%   Yukon
Territory		5%  5%
Nova Scotia  13%