Chartered accountants explain how HST can affect business people
The HST is now a reality.
“Under the HST, some items are subject to additional tax, while others are exempt or not charged the full 13 per cent,” said chartered accountant Doug Robinson, of Orangeville. “For many purchases there has been no impact at all. Transition payments, tax credits, and other measures have also been introduced to ease the transition to the HST.”
Robinson has information on how the HST might affect businesses:
Understand what is subject to additional tax: Services such as telecommunications, real estate fees, and legal and accounting fees are subject to more tax. The HST applies to new home purchases, although people may be eligible for a rebate of up to $24,000 for a portion of the HST paid.
Know what is exempt: Groceries, prescription drugs, some medical devices, municipal public transit, health and education services, legal aid, most financial services, child care, tutoring, music lessons and residential rents.
Be aware of point-of-sale rebates: Children’s clothing and footwear under $30, kids’ car seats and booster seats, diapers, feminine hygiene products, books, Newspapers and prepared food products sold for $4 or less will be charged only a five per cent federal portion of HST, not the 13 per cent. The rebate for the provincial portion will be provided at the point of sale.
Use transition measures: The province is providing three HST transition payments. The payments are $1,000 for families with annual income under $160,000 or $300 for those over age 18 with annual income under $80,000.
To get them, people must file tax returns in 2009 and 2010. Low-income earners are eligible for a sales tax credit up to $260, by filing a tax return. Ontario tax on the first $36,848 of income was reduced from 6.05 per cent to 5.05 per cent, effective Jan. 1. There are two things to do - control spending and file their tax returns.
from the Institute of Chartered Accountants of Ontario
