What gets taxed: PST-exempt goods and services to be subject to B.C.’s harmonized sales tax
The following goods and services are currently exempt from provincial sales tax (PST), but will be subject to the full 12-per-cent harmonized sales tax when it is implemented next July. With the new HST, businesses will be able to recover the PST portion of the tax they currently pay, rather than passing it on to consumers as part of the price of these items. Theoretically, that should mean that prices for these goods will come down by seven per cent as they become subject to the full tax.
GOODS
• Residential fuels (electricity, natural gas) and heating.
• Basic cable TV and residential phones.
• All food products (only basic groceries will remain exempt under new tax).
• Non-prescription medication.
• Vitamins and dietary supplements.
• Bicycles.
• School supplies (books will continue to be exempt).
• Magazines and newspapers.
• Work-related safety equipment.
• Safety helmets, life jackets, first-aid kits.
• Smoke detectors and fire extinguishers.
• Energy conservation equipment (e.g., insulation, solar power equipment).
SERVICES
• Personal services such as hair care.
• Dry cleaning.
• Repair services for household appliances.
• Household maintenance such as renovations and painting.
• Real estate fees.
• Membership fees for health clubs.
• Movie and theatre tickets.
• Funeral services.
• Professional services such as accounting and home care.
• Airline fares within Canada.
Source: B.C. Ministry of Finance
- How will the hotel room tax be impacted by the B.C. HST?The B.C. HST would apply to short term accommodation so the provincial hotel room tax would be wound down to coincide with the implementation of the B.C. HST. The tax rate on short term accommodation would be reduced from 8% to 7%.
- Will rebates of the B.C. HST be available to municipalities? A rebate of the provincial portion of the B.C. HST is proposed for those local governments that currently qualify for the federal rebate of GST. The rebate would reflect the fact that these organizations currently pay a certain amount of direct and embedded PST and would be set to generally protect the sector from paying additional tax.
Carbon Tax With the proposed point-of-sale rebate for motor fuels, the provincial portion of the B.C. HST would not apply to gasoline, diesel, marine diesel or aviation fuel including biofuels components used in a motor vehicle, boat or aircraft to the carbon tax payable on those fuels.
However, the B.C. HST will be applied on top of the purchase price including any carbon tax on all other fuels.
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