Dodge HST 'pre-collection period

Michael Smyth, The ProvinceApril 23, 2010 7:19 AM

Weary B.C. taxpayers have already drawn a black circle around an ignominious date on their 2010 calendars: July 1 -- the day when the dreaded HST kicks into effect. But I suspect far fewer taxpayers realize another date-that-will-live-in-infamy is approaching even faster: May 1, the day when the government's HST "pre-collection period" begins. Yup, the government is going to start charging the harmonized sales tax on some goods and services just one week from now -- a full two months ahead of the full HST implementation date. It's a sucker punch most taxpayers won't see coming until it hits them in the teeth next Saturday. But, if you act fast enough, it's a punch you can duck -- and save yourself some loot.

The HST "pre-collection period" works this way: Any HST-applicable goods and services that you pay for in advance, but which you will not take delivery of until July 1 or later, will be subject to the new 12-per-cent tax starting May 1. But if you pay for those same goods and services on April 30 or earlier, the HST will not apply, even if you take delivery of those goods and services after July 1.

Here's an example: Let's say you want to buy a pair of season tickets to the B.C. Lions this year. If you buy that pair of premium seats today, it would cost you $1,302. If you buy that same pair of season tickets May 1, the price jumps to $1,388. In other words, Lions fans, you better start scrambling like Jarious Jackson and pay for those season ducats right now, if you want to save yourself $86. Why the fast-approaching price hike? It's because football tickets are currently subject to the five-per-cent GST only. They are exempt from the seven-per-cent provincial sales tax. When the combined HST kicks in, PST-exempt items will jump seven per cent in price.

Thinking of taking a summer vacation? Then you'd be wise to book your airfare this coming week if you are flying after July 1. That's because airline tickets are also PST-exempt, but will get slammed with the HST come July 1. If you pay for those airline tickets before May 1, you will pay only the GST, and save seven per cent. Other PST-exempt items you should consider buying this coming week include concert tickets, symphony and theatre tickets, private summer camps for kids, season passes for attractions like Butchart Gardens near Victoria and annual fitness-club memberships.

I know what some of you are thinking: What if I need to put a new roof on my house this summer? Can I pay for it before May 1 and save seven-per-cent? "In theory, yes," famous home-renovation expert Shell Busey told me Thursday. "But it's risky to pay a contractor the full price in advance. What if the contractor disappears with your money? What if the work is unsatisfactory? Consumers should be cautious."

Finally, who says you can't avoid death and taxes? Prepaid funerals are set for a stiff price hike on May 1, but you can dodge the grim-reaping taxman if you pay for your own funeral before next Saturday. That might give you some comfort on your death bed -- if you can forget the B.C. Liberals promised not to bring in the HST in the first