While there are certainly mixed opinions about it, HST arrived in BC yesterday. The good news is that – at least from what I’ve been able to see first-hand – the transition from a vendor/retailer standpoint seems to have gone fairly smoothly. After all, in most cases businesses simply have to go from charging 5% GST and 7% PST, to charging 12% GST. That said, there has been a lot of confusion about the implications of HST beyond the simple example of selling goods to local consumers. If your business does more than this, you may want to double check the following two scenarios:
- Do you sell to out of province customer? If so be sure that you’re charging them the correct tax rates. You charge 12% HST to customers in BC, but if you sell to someone in Nova Scotia you need to charge them 15%. Ontario, New Brunswick, and Newfoundland & Labrador are all 13%. For customers in other provinces you will continue to charge only 5% GST.
- Does your business provide services? If so, and the service was performed before July 1 then under the transitional rules even though HST is now in place you would collect only GST for the work, not HST. If half of the work was performed prior to July 1 and half after then you would charge GST on the first half of the work, and HST on the other.
There is still a lot of confusion regarding out of province sales and regarding the transitional rules so it’s well worth the time to verify that you’re company is doing things correctly. For full details on the various transitional rules, refer the Ministry of Finance’s website here:
http://www.sbr.gov.bc.ca/business/Consumer_taxes/harmonized_sales_tax/hst.html#2
How did the transition go for your business? Did you have to update individual locations or point of sale terminals with the new tax rules, or do you use a centralized system or web application where things can be seamlessly updated all at once behind the scenes?