HST Last Minute Help

Canada Day is also HST day in Ontario and B.C. - and only days away now.  Surprisingly, about half of small businesses in both provinces say they won't be ready to apply the new tax, according to a survey done by Angus Reid, on behalf of tax-management software maker Intuit Canada (54% of respondents in Ontario and 47% in British Columbia) (Ontario and BC Small Businesses Say They're Not Ready for HST Deadline, TradingMarkets.com).

So for the benefit of those of you who are not ready, here's some last minute HST help.

Points to Remember About Harmonized Sales Tax (HST):

• The biggest change between charging PST and charging HST is that HST applies to many services that PST did not apply to.  Also, both Ontario and B.C. have point-of-sale HST rebates in place for some products.

• If you are already registered for GST, you don't need to register for HST.

• The Small Supplier exception applies to HST as well as GST, so if your small business makes less than $30,000 you don't have to register for, collect and remit HST.

• If you are selling goods or services out of province, you charge the GST/HST rate based on where the goods are being shipped to. Therefore, if you ship to B.C., charge 12%, to Ontario, Newfoundland and Labrador, or New Brunswick, charge 13%, to Nova Scotia 15% and if you sell to Alberta, Manitoba and Saskatchewan only charge 5% (the GST rate).

• Accounting software and/or applications designed for Canadian small business can make the physical transition easier. For example, The HST Setup Tool in QuickBooks Pro and Premier 2010 sets up the HST tax rate in a company file and automatically updates all items, vendor customer and account records to the new tax codes, saving hours of work. If you haven't yet, check and see if the accounting software/application you're using has an HST update.

For more detailed information on the HST, see:

• What You Need to Know About Ontario HST
• What You Need to Know About BC HST
• HST & Intangible Personal Property in Canada
• Charging HST on Services

And, of course, the Canada Revenue Agency has lots of information on HST and is ready to assist you. Visit their "Are you HST Ready?" page or phone them at 1-800-959-5525 (TTY 1-800-665-0354).

If you know how, but the thought of applying the Harmonized Sales Tax throws you into a tizzy, read this Globe and Mail Editorial: The HST is no cause for alarm. Calming food for thought.

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