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SPECIAL FEATURE
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Other Resources
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PLEASE NOTE THAT BC VOTERS HAVE OPTED TO SCRAP THE HST TAX
The BC government will seek to return to a Provincial Sales Tax within 18 months,
meaning the old tax will be restored by March 31, 2013. STAY TUNED FOR MORE INFO.
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a comprehensive list of goods and services subject to the
BC HST, those that are exempt, point of sale HST rebates
and input tax credit issues. In addition, we examine how
the new Harmonized Sales Tax or B.C. HST will affect other
current taxes on fuel, carbon, property and tobacco. |
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A list of goods and services that are subject to the new
BC HST, those that are not affected and those that are actually
exempt. |
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How does the BC HST affect other taxes including the Hotel
Room Tax, Motor Fuel Tax, Carbon Tax, Tobacco Tax and Property
Transfer Tax? |
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OTHER
B.C. HST RESOURCES & HARMONIZED SALES
TAX ARTICLES |
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Wondering What Goods and Services are Subject
to the New BC HST?
As with any transition between taxes, there is much confusion
among the public and consumers as to the new laws and guidelines.
Such is the case with the implementation of the B.C. Harmonized
Sales Tax or BC HST of 12%, what goods and services are subject
to this new tax? And what products that were charged provincial
sales tax or PST of 7% will be charged at 12% HST now? Basically
speaking, the B.C. Harmonized Sales Tax is the harmonization or
combination of the 2 taxes that British Columbians pay currently.
However, some goods and services are subject only to PST and some
only to GST while others are subject to both taxes. For the new
BC HST, everything will be taxed at 12%. Here is a list of BC
goods and services that used to be only charged 7% PST, and will
now be subject to the entire harmonized sales tax of twelve per
cent.
GOODS subject to BC Harmonized Sales Tax
Energy conservation equipment (e.g., insulation, solar power
equipment), bicycles, schools supplies (although books will
be exempt), smoke detectors and fire extinguishers, work related
safety equipment basic cable TV and residential phones, non-prescription
medication, vitamins and dietary supplements, residential fules
(electricity, natural gas) and heating, all food products (only
basic grociers will remain exempt from BC HST), safety helmets,
life jackets, first aid kits, magazines and newspapers.
SERVICES subject to the new B.C. HST
Airline fares within Canada, Funeral services, Real estate fees,
Membership fees for health clubs, dry cleaning, personal services
such as hair care, Movie and theatre tickets, Professional services
such as accounting and home care, Repair services for household
appliances, and Household maintenance such as renovations and
painting.
GOODS and SERVICES that will actually cost
LESS!
Liquor at restaurants will actually end up costing less with
the integration of the 12% HST in British Columbia. Currently,
there is a 15% tax on liquor in BC restaurants (that’s
5% GST and 10% liquor tax). This 15% liquor tax will be replaced
with the 12% harmonized sales tax, reducing the taxes by 3%.
GOODS and SERVICES that are exempt from the
B.C. Harmonized Sales Tax of 12%
These include fuel including gas, diesel and biofuel in addition
to low income families who will receive HST refund cheques quarterly
to compensate for the 12% HST. The HST refund cheques to low
income families is in addition to the federal GST refund cheques
as well as the BC carbon tax credit cheques that they currently
receive. Also, children’s items including books, clothing,
footwear, car seats, booster seats, diapers and feminine hygiene
products are exempt from the 12% BC HST tax.
How Does the B.C. HST interact with other
taxes?
Obviously, the implementation of a new harmonized value added
tax will have influence on existing taxes throughout British Columbia,
so here is more information about how the B.C. Harmonized Sales
Tax will influence the current Hotel Room tax, Motor Fuel Tax,
Carbon Tax, Tobacco Tax and Property Transfer Tax on real estate.
In most cases, the B.C. HST will eliminate the existing taxes,
but in a few cases, the harmonized sales tax will add to the existing
tax structure.
How does the B.C. HST affect the Hotel Room
Tax?
The B.C. Harmonized Sales Tax will apply to all short term accommodations
and housing. As of July 1, 2010, the B.C. Hotel Room Tax will
be eliminated and replaced by the B.C. HST. The current B.C.
Hotel Room Tax is at 8% while the B.C. Harmonized Sales Tax
on short term accommodations is at 7%, thereby reducing the
effective tax rate by 1%.
How does the BC HST affect Motor Fuel Tax?
As the BC Government has indicated that point of sale rebates
on motor fuels and other gas/biofuels will be implemented right
away, the provincial portion of the B.C. HST would not apply
to motor fuels in the province. This includes all forms of biofuels,
aviation fuel, marine diesel, diesel as well as car gasoline.
How does the B.C. Harmonized Sales Tax affect
the Carbon Tax?
Like above, the BC Government has indicated that the carbon
tax on fuels, diesel and biofuels will not be subject to the
new BC HST of 12%. Therefore, the Harmonized Sales Tax will
not affect the current Carbon Tax.
How does the B.C. HST affect the Tobacco Tax?
The provincial British Columbia Harmonized Sales Tax HST will
be applied on top of the purchase price of tobaccao in the province.
The B.C. HST will also be applied on top of the tobacco tax
and all tobacco products.
How does the provincial B.C. Harmonized Sales
Tax affect Property Transfer Tax?
As the PTT or B.C. property transfer tax is paid based on the
fair market value of the B.C. property or real estate home being
transferred from the seller to buyer, the BC HST will not be
applied to any resale property. In addition, in the case of
new homes and new construction property where GST is applied,
the GST will not be included for the purposes of determining
the fair market value in which the property transfer tax or
PTT is calculated.
The Good, The Bad and The Ugly Surrounding the
British Columbia Harmonized Sales Tax
According to the Georgia Straight: The province of BC has made
public a small number of goods and services that will be HST exempt.
But don’t get your hopes too high, because there are very
few HST exempt products and services out there once July 1st hits.
The BC HST exempt goods and services will include such things
as gasoline, diesel fuel, aviation fuel, marine disel, which will
be eligible for point of sale HST rebates. Therefore, airlines
and other transportation companies will have to find other excuses
for increasing their costs, rates and taxes on the consumer. In
addition, some goods and services in British Columbia that were
previously PST exempt will now be subject to the new 12% BC harmonized
sales tax or HST. These include such things as hair cuts and restaurant
meals. From the Vancouver and BC housing industry perspective,
these items also may include environmentally friendly construction
materials and appliances which are currently PST exempt, but will
be subject to the new BC harmonized sales tax of 12%. Overall,
most items will be taxed at the higher rate come next summer.
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