HST Information and how it might affect you

The Straight Goods: HST Edition

It goes without saying that one of the most discussed political topics in our province today is the Harmonized Sales Tax, or HST. With a wide variety of information sources available on the HST, I thought it was important to provide the following breakdown.

Here are my latest Straight Goods.

What is the HST?

• In short, the HST combines the 7% provincial sales tax (PST) with the 5% federal Goods and Services Tax (GST) resulting in a Harmonized Sales Tax (HST) of 12%.

Why is the HST important?

• During these difficult global economic times, the HST is the single biggest thing we can do to make us more competitive and help create more jobs across the province.
  
  
• Currently, PST is applied at every step in the creation of a product. These multiple PST charges are included in the price you pay at the store - even though you can't see it.
  
  
• Multiple PST charges mean BC industries that export goods across the world are at an incredible disadvantage today in comparison to the 130 countries that already operate under an HST-value added tax system. That means higher costs for BC companies, higher prices, lower sales, and fewer jobs. Lower sales means lower government revenues for services like health care and education.
  
  
• If you're buying products here at home, you're paying both the hidden PST and then PST again on the final purchase price. Under the HST system, the "tax-on-tax" you're paying today will be completely eliminated.

What does the HST mean to you as a consumer?

• Almost all products currently have both PST and GST charged (new cars, electronics, furniture, etc.), so there will be absolutely no difference in the tax charged on those products. You paid 12% before, you'll pay 12% now.
  
  
• Some important PST exemptions will continue to apply. You'll pay no more than you do today on gasoline, home energy use, books, children's-sized clothing and footwear, children's car seats and car booster seats, diapers and feminine hygiene products.
  
  
• All existing GST exemptions will continue to apply, meaning you'll pay no more tax on basic groceries than you do today.
  
  
• Some services will see an increase in tax such as restaurant meals and some services like haircuts, but others will go down such as the hotel tax (8% to 7%) and the the tax on liquor served on site at restaurants and pubs (15% to 12%).

What HST rebates are available for homebuyers, low-income families and seniors?

• It's true that the HST will apply to new home sales - but a partial rebate will ensure that new homes up to $525,000 will bear no more tax than under the current PST system, while homes above $525,000 will receive a flat rebate of about $26,250. There is no HST on previously-owned homes being re-sold.
  
  
• A refundable B.C. HST Credit will be paid four times a year to help offset the impact of the tax for low income families, seniors and individuals. The amount of the credit would be $230 per family member for individuals with income up to $20,000 and families with incomes up to $25,000.