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British Columbia will be adopting a 12 per cent harmonized sales tax as of July 1, 2010 Finance Minister Colin Hansen announced today.

B.C. will have the lowest Harmonized Sales Tax (HST) in Canada, by combining the seven per cent B.C. Provincial Sales Tax (PST) with the five per cent federal Goods and Services Tax (GST), for a single sales tax rate of 12 per cent, the province said.

Robbie wrote:British Columbia will be adopting a 12 per cent harmonized sales tax as of July 1, 2010 Finance Minister Colin Hansen announced today.

B.C. will have the lowest Harmonized Sales Tax (HST) in Canada, by combining the seven per cent B.C. Provincial Sales Tax (PST) with the five per cent federal Goods and Services Tax (GST), for a single sales tax rate of 12 per cent, the province said.

Well, that sucks. I don't live there anymore so it doesn't affect me personally, but I lived in Halifax when there was the discussion to have an HST there. In fact, it started out as a BST for "blended sales tax". However, that quickly changed to HST once the people started calling it the Bull Sh*t Tax. Now, why Bulls didn't become Horses, I have no idea. But they didn't and the HST was here to stay.

In Nova Scotia, the big "plus" to this was how there would be less taxes on certain items because the HST total was going to be less than the existing PST + GST sum. I see that they'r'e not even trying that in BC. Just adding them together to screw over the public. While it's true there was less tax on some items, it was things like appliances and cars which you don't buy very often, while things like heating oil was upping in tax by about 10% because it previously didn't have provincial taxes applied, only GST.

I assume the same thing will happen in BC. You get screwed on your heating bill and other things. The lone difference is that there won't even be a savings when you buy a new refrigerator because they're just adding together the current GST and PST.

C'est la vie.

Of course I can't find it now, but I thought I read somewhere that those areas that are PST exempt will remain so...

Time to go digging I guess...

aha! I found it!

The new combined tax will also have exemptions similar to the provincial sales tax.

Those will include sales books, children's clothing and shoes, children's car seats and diapers.

full CTV.ca article here

Lui05 wrote:

Robbie wrote:British Columbia will be adopting a 12 per cent harmonized sales tax as of July 1, 2010 Finance Minister Colin Hansen announced today.

B.C. will have the lowest Harmonized Sales Tax (HST) in Canada, by combining the seven per cent B.C. Provincial Sales Tax (PST) with the five per cent federal Goods and Services Tax (GST), for a single sales tax rate of 12 per cent, the province said.

Well, that sucks. I don't live there anymore so it doesn't affect me personally, but I lived in Halifax when there was the discussion to have an HST there. In fact, it started out as a BST for "blended sales tax". However, that quickly changed to HST once the people started calling it the Bull Sh*t Tax. Now, why Bulls didn't become Horses, I have no idea. But they didn't and the HST was here to stay.

In Nova Scotia, the big "plus" to this was how there would be less taxes on certain items because the HST total was going to be less than the existing PST + GST sum. I see that they'r'e not even trying that in BC. Just adding them together to screw over the public. While it's true there was less tax on some items, it was things like appliances and cars which you don't buy very often, while things like heating oil was upping in tax by about 10% because it previously didn't have provincial taxes applied, only GST.

I assume the same thing will happen in BC. You get screwed on your heating bill and other things. The lone difference is that there won't even be a savings when you buy a new refrigerator because they're just adding together the current GST and PST.

C'est la vie.

Newfoundland went along with that HST as well. Before that, they had, at the time, a 12% PST and a 7% GST, and to make matters worse, they were not simply added, but compounded, meaning the total sales tax wasn't 19%, but rather 100% * [(1.12)(1.07) - 1] = 19.84% !

What are the advantages of having a Harmonized sales tax as opposed to separate PST and GST ?

TheLionKing wrote:What are the advantages of having a Harmonized sales tax as opposed to separate PST and GST ?

The advantage seems to be with the government. Does this mean that any goods and services that were subject to the GST, but which were PST-exempt, will now effectively have the PST added?

sj-roc wrote:

TheLionKing wrote:What are the advantages of having a Harmonized sales tax as opposed to separate PST and GST ?

The advantage seems to be with the government. Does this mean that any goods and services that were subject to the GST, but which were PST-exempt, will now effectively have the PST added?

That's my understanding. Not pleased.

TheLionKing wrote:

sj-roc wrote:

TheLionKing wrote:What are the advantages of having a Harmonized sales tax as opposed to separate PST and GST ?

The advantage seems to be with the government. Does this mean that any goods and services that were subject to the GST, but which were PST-exempt, will now effectively have the PST added?

That's my understanding. Not pleased.

It seems there are a few items that will effectively remain PST exempt, such as gas, groceries, books and children's clothing, but in general that exemption will otherwise be removed:

http://www.vancouversun.com/business/fp ... story.html

I wonder how it will apply to alcoholic beverages bought for consumption in licensed establishments, for which the current PST is 10%?

TheLionKing wrote:What are the advantages of having a Harmonized sales tax as opposed to separate PST and GST ?

It will simply for some business the tasks of calculating, collecting and submitting the taxes but it will result in a slightly larger bite against the consumer. It isn't the end of the world but it has it's pro's and cons.

I will wade in on how I see it. I have been a bookkeeper for some time, so have a bit of an idea from a company perspective on how it will work.

Some companies will benefit from a few different things here:
Only having to file one form instead of two. (few companies have dedicated PST people, so realistically, time will be saved, but I doubt that companies will see a substantial dollar savings)
Most businesses, while paying more tax, will also be entitled to a larger credit for HST paid, so generally businesses will see a benefit from this. Stuff that companies paid PST on before, now will be entitled to credits against HST collected. The question is, will it be passed along to the customers? In the short-term, I doubt it.

As far as the general consumer, we will be bearing the brunt of this, yet again. So much more will have taxes on it that we only paid GST on before.
Restaurants, services (lawyers, accountants, bookkeepers, repairs, etc), other things that were generally PST exempt.

While there will be some "refunds" at the till for some things like childrens clothing, as consumers, our tax bill has just shot up substantially. Our only hope, is that companies reduce prices to allow for their overall savings, but as mentioned before, I sincerly doubt it.

Americans often criticize Canadians about being very stingy and cheap when it comes to tipping.

But of course!

A typical Canadian has a much lower income, combined with a much higher income tax and with the upcoming HST, a higher sales tax as well!

Canadians simply cannot afford to throw their money around.

Robbie wrote: A typical Canadian has a much lower income, combined with a much higher income tax and with the upcoming HST, a higher sales tax as well!

Robbie, I am surprised at you. For someone that normally does such good research, for you to throw out such innaccurate statements just bewilders me. I know it is a common myth that we make less and pay more in tax, but you couldn't be further from the truth. It is very complicated and varies from individual to individual, but in my experience, an individual that files a tax return here, and in the states, generally (like I said, varies) pays less here, than in the States. Many, many factors come into play, tax brackets, types of income and State, versus Provincial Income Tax levels. If we take the state and provincial income tax rates out of the equation, generally it is higher in the States than in Canada. As well, many sources of income are taxed in the states, that are not taxed here. Inheritances, gifts, and windfalls (lottery winnings, for instance) are heavily taxed in the states, but not here. That being said, I have seen some people that have paid more tax in Canada in the States, but generally speaking, it is usually the other way around.

http://www.oecd.org/ This site has some wonderful information on tax comparisons. Statistics can be very misleading, as so many factors come into play for any individual.

One thing we do have that the states generally doesn't have is value added tax (GST) but at 5% we are one of the lowest value added tax jurisdictions in the world. Compare to some nations at up to 25%.

Sorry, didn't mean to sound like I was lecturing, just one of those pet peeves.

kamfan wrote:

Robbie wrote: A typical Canadian has a much lower income, combined with a much higher income tax and with the upcoming HST, a higher sales tax as well!

Robbie, I am surprised at you. For someone that normally does such good research, for you to throw out such innaccurate statements just bewilders me. I know it is a common myth that we make less and pay more in tax, but you couldn't be further from the truth. It is very complicated and varies from individual to individual, but in my experience, an individual that files a tax return here, and in the states, generally (like I said, varies) pays less here, than in the States. Many, many factors come into play, tax brackets, types of income and State, versus Provincial Income Tax levels. If we take the state and provincial income tax rates out of the equation, generally it is higher in the States than in Canada. As well, many sources of income are taxed in the states, that are not taxed here. Inheritances, gifts, and windfalls (lottery winnings, for instance) are heavily taxed in the states, but not here. That being said, I have seen some people that have paid more tax in Canada in the States, but generally speaking, it is usually the other way around.

http://www.oecd.org/ This site has some wonderful information on tax comparisons. Statistics can be very misleading, as so many factors come into play for any individual.

One thing we do have that the states generally doesn't have is value added tax (GST) but at 5% we are one of the lowest value added tax jurisdictions in the world. Compare to some nations at up to 25%.

Sorry, didn't mean to sound like I was lecturing, just one of those pet peeves.

FWIW, I happened to hear Colin Cowherd on 1040 the other morning talking about taxes. In the context of its influence on how free agent athletes choose to sign with various teams, he was comparing state income tax rates and claimed that in New York you get to keep 37 cents on the dollar, which I interpreted to mean that the top marginal income tax rate is about 63%; he actually pointed out that it was "even higher than in Canada" which is true if his premise is correct.

I've also read that some US jurisdictions even levy municipal income taxes, with Detroit being among the most severe; they charge income tax against not only residents but also people who only happen to work in the city while living outside city limits!