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Ten “HST” Facts April 19, 2010

Posted by admin in : Bill Bennett , comments closed

My friend Pat Bell put together the Ten Facts below that sorts out some of the misinformation on HST.

1.       You may have heard  “The HST adds $2,100 to your yearly costs”
a.       You would need to spend an additional $30,000 on currently PST-exempt items to reach $2,100
b.      For a Family of 4 with a $60,000 annual income the true impact is $8.91 per month.
c.       A Senior Couple with a $30,000 income will be impacted by an additional $1 per year.
d.      A Family of 4 with a $90,000 income will be impacted by an additional $14.83 per month.
e.      A Family of 4 with a $30,000 income will actually benefit by $44.58 per month (because of the BC HST Credit)
 
2.       You may have heard “Everything will cost more”
The vast majority of retail items will see no tax change with HST
Items on which you pay PST and GST today stay exactly the same. (7%PST + 5%GST = 12% HST)
a.       New cars, trucks, boats, recreational vehicles
b.      Furniture
c.       Electronics
d.      Kitchenware
e.      Toiletries
f.        Hardware and tools
g.       Adults clothing
h.      Pet Food
 
3.       You may have heard “Housing will cost more”
a.       No HST on used homes  which make up 80% of total sales in BC
b.      HST rebate will apply on new homes up to $525,000 – maximum $26,250
c.       Homes above $525,000 are eligible for a rebate of $26,250
d.      In BC –  73% of home sales are under $500,000
e.      In Northern BC  99%  of home sell for less than $500,000
 
4.       You may have heard  “You’ll pay more for car insurance, home insurance…”
The HST won’t change the price of any of those items. They are exempt.
 
5.       You may have heard “Staying warm and keeping the lights on will cost more”
Home heating fuels and residential electricity are eligible for a point-of-sale rebate, including:
a.       Oil
b.      Natural gas
c.       Propane
d.      Wood and wood pellets
HST won’t increase the cost of heating or powering your home
 
6.       You may have heard “It will cost more to feed my family”
These are ALL zero rated –
a.       basic groceries such as milk, bread, and vegetables.
b.      agricultural products such as grain, raw wool, and dried tobacco leaves.
c.       most farm livestock.
d.      most fishery products such as fish for human consumption.
e.      prescription drugs and drug-dispensing fees (in case you buy these at the grocery pharmacy).
The general rule of thumb is – if there is currently GST on any item at the grocery store than HST will apply. 
 
7.       You may have heard “The disabled will be impacted by additional cost for medical devices”
These Medical devices are zero-rated:
(a)    hearing aids
(b)   heart-monitoring devices
(c)    hospital beds
(d)   breathing apparatus
(e)   asthmatic devices
(f)     prescription eyeglasses/contact lenses
(g)    artificial eyes
(h)   artificial teeth such as dentures, crowns and bridges, orthodontic appliances
(i)      aids to locomotion such as a chair, commode chair, walker, wheelchair lift or other aid to locomotion for use by an individual with a disability
(j)     patient lifters
(k)    wheelchair ramp; portable wheelchair ramp
(l)      modifying motor vehicles to adapt the vehicle for the transportation of an individual using a wheelchair
(m) prescription orthotic and orthopedic devices
(n)   prosthesis/devices
(o)   canes or crutches
(p)   articles for blind individuals
(q)   guide dogs for blind individuals and hearing ear dogs
(r)     supplies and services related to medical and assistive devices.
 
8.        You may have heard “Children’s clothes and items will increase”
Children’s clothing and items below will not be subject to the provincial portion (7%) of the HST or HST exempt
(a)     Children’s clothing designed for babies, girls, and boys up to and including girls’ Canada Standard Size 16 and boys’ Canada Standard Size 20, or clothing designated for girls and boys in sizes small, medium or large if the clothing does not have a designated Canada Standard Size would be eligible for point-of-sale rebate.  This would not include costumes or clothing like sports protective equipment.
(b)    Children’s footwear designed for babies, girls, and boys up to and including girls’ size 6 and boys’ size 6, including footwear without a numerical size that is designated for girls or boys in sizes small, medium or large would be eligible for point-of-sale rebate. This would not include skates, rollerblades, ski-boots, footwear that has cleats, or similar footwear.
(c)    Diapers, including cloth and disposable diapers designed for babies and children, and diaper inserts and liners, rubber pants, and training pants would be eligible for point-of-sale rebate.   Incontinence products would be zero-rated under HST, in accordance with current GST rules.
(d)   Children’s car seats and car booster seats that are restraint systems or booster cushions that conform with Transport Canada’s safety requirements for Standards 213, 213.1, 213.2 and 213.5, as described under the federal Motor Vehicle Safety Act would be eligible for point-of-sale rebate.
 
9.       You may have heard “Education costs are going to increase including my child’s music lessons”
Educational services such as courses supplied by a vocational school leading to a certificate or a diploma which allows the practice of a trade or a vocation, or tutoring services made to an individual in a course that follows a curriculum designated by a school authority;  music lessons are not taxable.
 
10.   You may have heard “HST will hurt small business”
HST will be good for business. It will replace hidden sale tax and small businesses will get additional tax cuts.  Currently, PST is applied at every step in the creation of a product. Those multiple PST charges are embedded in the price you pay at the store – even though you can’t see it. And of course, you pay PST on the final purchase price. Under the HST system, most of those embedded costs are removed and savings can be passed on to the consumer.