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The 8% Ontario sales tax and the 5% GST were combined into a
single 13% value-added sales tax that is federally administered, effective July 1, 2010.
What is Taxable?
Consumers now have to pay 13% HST on all goods and
services on which they previously paid 5% GST, except for several items which
were previously RST exempt and are not subject to the provincial portion of the HST.
The following are some made-in-Ontario components:
Books, children's clothing and footwear, diapers,
children's car seats and car booster seats, and feminine hygiene
products are exempt from the 8% provincial portion of the tax.
Purchasers of newly constructed homes under $400,000
are not be subject to an additional tax burden. Buyers of new
homes valued between $400,000 and $500,000 can claim a proportional
New rental housing rebate, similar to the enhanced
new housing rebate, for new residential rental properties.
Up to $400 million in one-time sales tax credits were
to be provided to help small businesses make changes to point-of-sale
and accounting systems.
Provincial portion of the tax rate on transient
accommodation, such as hotel rooms, rose from 5% to 8%.
Approximately $40 million a year will be allocated to support
destination marketing in Ontario tourism regions once these are
Qualifying prepared food and beverages that are
ready for immediate consumption and are sold for a total price of
not more than $4.00
Used vehicles purchased privately (not
from an HST registrant) are still subject to a retail sales
tax (RST) of 13% (increased from 8%).
Ontario RST continues to apply at 8% on
certain types of insurance, including house insurance,
group insurance, contributions paid into funded plans or on
benefits paid out of unfunded plans as well as payments made into
insurance schemes or compensation funds established under an Act
of Canada or Ontario. This is in addition to the Premium Tax
on certain insurance premiums. See Premium
Tax on the Revenue Ministry website.
Input Tax Credits
Businesses which are registered to collect GST or HST can
claim input tax credits to recover the GST or HST that they have paid,
with certain temporary exceptions for large businesses (see below). The change to HST
meant a significant savings and boost in
productivity for businesses in Ontario,
they no longer have to pay PST
they no longer have to prepare PST remittances
they save on consulting costs - the PST rules
are very complicated, and frequently require professional advice in
their interpretation, and courts to make the final interpretation
employees no longer have to spend time trying to find
the answers to PST questions
PST audits eliminated
For further information on the
HST, see the following: