Canadian Tax and
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Ontario HST

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Sales Taxes  ->  GST/HST -> 
   Ontario Tax ->  Provincial Sales Tax -> ON HST

Ontario Harmonized Sales Tax (HST)

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 HST Taxable in Ontario?

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:

bulletBooks, 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.
bulletPurchasers 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 rebate.
bulletNew rental housing rebate, similar to the enhanced new housing rebate, for new residential rental properties.
bulletUp 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.
bulletProvincial 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 established.
bulletAdditional point-of-sale exemptions announced November 12, 2009:
bulletPrint newspapers
bulletQualifying prepared food and beverages that are ready for immediate consumption and are sold for a total price of not more than $4.00
bulletUsed vehicles purchased privately (not from an HST registrant) are still subject to a retail sales tax (RST) of 13% (increased from 8%).
bulletOntario 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 Ontario Insurance Premium Tax on the Revenue Ministry website.

Ontario HST 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, because:

bulletthey no longer have to pay PST
bulletthey no longer have to prepare PST remittances
bulletthey 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
bulletemployees no longer have to spend time trying to find the answers to PST questions
bulletPST audits eliminated

For further information on the HST, see the following:

    - GST/HST New Housing Rebate

    - What is Taxable, Exempt or Zero-Rated under GST/HST?

Ontario Resources:  Harmonized Sales Tax (HST)

Canada Revenue Agency (CRA) Resources:

    - GST/HST related forms and publications

    - Notice 244 - Harmonization of the Ontario Retail Sales Tax with the GST - Questions and Answers on Housing Rebates, Transitional Rules for Housing and Other Real Property Situated in Ontario

    - GST/HST Information Sheets:  Harmonized Sales Tax:

          - GI-060 Point-of-Sale Rebate on Newspapers

          - GI-062 Point-of-Sale Rebate on Feminine Hygiene Products

          - GI-063 Point-of-Sale Rebate on Children's Goods

          - GI-064 Point-of-Sale Rebate on Prepared Food and Beverages

          - GI-065 Point-of-Sale Rebate on Books

    - GST/HST Information SheetsTransition to the Harmonized Sales Tax:

          - GI-053 Freight Transportation Services

          - GI-054 Passenger Transportation Services

          - GI-055 Transportation Passes

          - GI-056 Services

          - GI-057 Memberships

          - GI-058 Admissions

          - GI-059 Intangible Personal Property

          - GI-070 Goods

Ontario Newsroom

    - Report estimates benefits of Ontario's tax plan

    - More Point-Of-Sale Exemptions for Ontario's HST - November 12, 2009

Revised: May 21, 2019



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