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Wednesday, December 9, 2009

HST in Ontario...Hated Sales Tax??

That's what some people are saying.

I'm still not too sure what this means for us. But in Ontario the GST (5%) and the PST (8%) is going to be harmonized into ONE tax of 13%. Apparently this will create more jobs over the next 10 years, however it will also create more tax on somethings such as gas, funerals, haircuts, home heating fuel, and cable. This will take effect July 1, 2010.

For those of you from BC, you are also going to merge your PST and GST starting July 1st.

Things only subject to 5% GST include books, kid's clothes, footwear, diapers, kid's car seats/booster seats, and feminine hygiene products.

People that buy newly built homes under $400,000 will not be subject to extra tax. Buyers of new homes between $400,000 and $500,000 could claim a proportional rebate.

PST on hotel rooms is going to be 8% (instead of 5%) and is going toward marketing tourism in Ontario tourism regions.

Businesses will be given some credit from the government if they have to change their accounting systems.

As part of the proposed sales tax reform, cash payments would be provided to Ontario tax filers, in each of June and December 2010, and June 2011.
  • Eligible families with income of less than $160,000 would receive 3 payments totalling $1,000.
  • Eligible individuals who earn less than $80,000 would get 3 payments totalling $300.
  • To qualify for the 2 payments in 2010, a 2009 tax return would have to be filed.
  • To qualify for the 2011 payment, a 2010 tax return would have to be filed.
If this applies to you, make sure to do your taxes this year and next! I'll take it!

I'm not sure whether I like it yet or not, I just don't know enough about it. It seems fairly similar for things, 13% either way on most things.

Good news, it doesn't apply to coffee and donuts. Woohoo!

7 comments:

  1. Hmmm...interesting...we were told when we bought our new house, that in anticipation of the new tax, they put the 8% into the cost of the house, instead of us having to pay this big huge payment at the end. I wonder if that means our house will cost less now since it's under the $400,000 mark. We're going to have to have our lawyer look into that.

    I am certainly looking forward to the little bit of money that they will be sending out. $1000 will be nothing to sneeze at. I will get it AND Amy and Shane will get it.

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  2. I think it only applies to newly contstructed houses. That is how I understood it. Not sure how newly built your house is.
    $1000 will be helpful! I'm looking forward to the $300, I hope GST cheques are still included, but if there is no longer GST, I am assuming no.

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  3. My parents are in BC - I asked them their thoughts on it, but they felt similar to you that there just wasn't enough information yet to make a fully informed decision. It will probably be a 'time will tell' situation when it comes to how people feel about the changes.

    I'm lovin' good 'ol Alberta - we have just 5% GST

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  4. I personally hate it when sales taxes change. One, everyone freaks out. Two, not enough information is given out to figure out good bad or no change?

    The HST will do one thing and thats get rid of the PST at multiple levels of manufacturing. for example a car: Raw materials are taxed at the PST rate (GST exempt due to not being a final sale) they are turned into car parts by car part makers, those car parts are sold to the car manufacturer and are taxed again at PST rate (GST exempt due to not being a final sale) those parts are used in the cars and the cars are sold to the dealerships at the PST (GST exempt, not final sale) The dealership then sells the car to the end user which is taxed at GST and PST rate. however it's a car that has had PST added into the cost 3 or 4 times along the way. over and over again.

    I should really go into this on my blog.

    regards,

    Jason

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  5. Good post. I tried to find out if BC has any rebates out there but so far I'm not seeing it. I am not a fan of HST. I do believe it will help save money for businesses and in a perfect world that means they should pass the savings on to the consumer by lowering prices. But is that going to happen? Not likely! So, in the end, as always, taxes will hurt the consumer. I think it's disgusting. I too could go and on about this.

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  6. No one believes that Ontario will emerge from this recession the same as it went in. We need to become more competitive.

    A report by TD Bank estimates the HST will reduce cost of doing business in Ontario by roughly $5.3 billion and that the majority of these savings will be passed on to customers within the first year. In fact, the majority of items you purchase - 80 percent – will see no tax change at all.

    A recent report by economist Jack Mintz confirms that Ontario needs to reform its tax system to create jobs and put Ontario back on its feet. It says, as a result of the HST, within 10 years Ontario would see:
    o An estimated 591,000 additional new jobs
    o Increased capital investment of $47 billion
    o Increased overall annual worker incomes of up to 8.8 per cent, or $29.4billion

    We have a choice: we can refuse to fix what’s broken, resign ourselves to the idea that Ontario will be less competitive or we can move forward and get the jobs Ontario needs.

    Please visit: http://sites.google.com/site/thetruthaboutthehst/

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  7. The cost of doing business will go down, but the cost of items at bought at businesses will go up. Things that are not taxed right now, will be taxed when this starts on July 1. For example heating fuel will now be taxed, just think how much more expensive your heating bill will be next winter. The $1000 rebate some families will be getting is not enough to cover the extra money these families will be paying out in extra taxes through out the year. The government is getting away with this because not enough people know or understand enough about it to complain to their MPs.

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