The Business Chat – HST Part Two

There seems to be some confusion about this HST stuff so I thought today that I’d take another kick at it. The government has several websites with all the appropriate information on them. They are clear as mud. I have had very good luck with the people manning the phones at 1-800-959-5525. Just press buttons until you find a human, they know what they’re talking about.

On a bead forum the other day there were several discussions about collecting tax. Let me say this loud and clear: artist made goods are NOT exempt from HST or in provinces without the HST, from the GST/PST. This is a silly rumour that can get you into trouble. The good fairy isn’t going to make your tax obligations go away. She’s on holiday.

The HST is governed by the same rules as the GST. For those in Ontario or BC where the HST has just been implemented, if you paid GST before July 1, 2010, now you pay HST. Items that were exempt from the GST before July 1 (such as certain foods), are now exempt from HST.

Where tax collection starts getting difficult is in the online world. For online sales, you collect the tax applicable for the province where the buyer takes possession of the goods. Keep in mind PST is a provincial sales tax, so if you are not in that province, then you cannot collect PST. You do collect GST from all provinces because it is a federal tax. If a province has HST then you collect HST. If a province does not have HST, and you are in the same province as the buyer, you collect GST and PST. If a province does not have HST, and you are in a different province than the buyer, you collect GST only.

Prov HST GST PST
BC 12% 5%
AB 5%
MAN 5% 7%
SASK 5% 5%
ON 13% 5%
QC 5% 7.5%
NB 13% 5%
NS 15% 5%
NF 13% 5%
PEI 5% 10%
NWT 5%

For example, using the above chart, I am in Ontario and I sell a pendant online for $50 to someone in Ontario. I charge $50 + $6.50 (HST). I sell a $50 pendant to someone in BC. I charge $50 + $6 (BC HST). I sell a $50 pendant to someone in PEI. I charge $50 + $2.50 (GST). I sell a pendant to someone in Alberta. I charge $50 + $2.50 (GST). All taxes collected are remitted on the GST/HST form. Don’t worry about when you need to remit, trust me, they will find you in plenty of time. For more riveting information read the previous discussion HST Part One – What is it and do you have to deal with it? by clicking here. OK, so I don’t get to blog about pretty shiny stuff however it’s very useful.

One Comment

  1. Anonymous

    How about if you never collected GST prior to the HST implementation. This would be the case if your business makes under 30 grand a year. If you are in this category i understand you don't collect any tax at all. I have been told this by many source. Do you agree?

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