Harmonized Sales Tax
The Province and the federal government have signed an agreement on the implementation of HST in British Columbia. The Comprehensive Integrated Tax Coordination Agreement (CITCA) contains the terms and conditions under which B.C. will participate in the HST with the federal government.
The new HST taxation program will replace the current PST & GST programs starting July 1, 2010.
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 current PST system, embedded PST results in higher production costs, less investment, fewer jobs and lower wages. The proposed HST will save B.C. businesses about $2 billion and result in more investment, jobs and higher wages.For example, PromoKeychain.com currently pays PST on equipment used to operate its business. That cost and other business inputs like it are passed down to the consumer who purchases the end product.
Under the proposed Harmonized Sales Tax (HST) most taxes paid on business inputs are refunded to the business, and those savings can be passed on to consumer.
Lower cost of doing business:
The proposed Harmonized Sales Tax (HST) will reduce costs for B.C.'s small and medium-sized businesses by eliminating the PST on a number of business costs.
- For example, PromoKeychain.com will no longer pay sales tax (PST) on products which are considered business “inputs” under HST such as:
- fridges, stoves, freezers, dishwashers and other appliances
- energy for heat, cooking and operating equipment and lighting
- cleaning supplies, such as rags, soaps and cleaning solutions,
- cash registers, computer hardware and software
- equipment repair and maintenance services
- paper towels and toilet paper
- customer bills and menus
- kitchen implements and knives
- plates, bowls, glasses, cups, other reusable dishes, and cutlery
- coffee machines, blenders, mixers and other small appliances
- free‐standing equipment such as juice dispensers, ice machines and coolers
- office equipment, supplies and furniture,
- advertising materials, such as flyers and brochures
- items purchased to give away as free promotions
Lower Compliance Costs:
Collecting, accounting, and remitting PST is a costly and complicated process for both the business owner and the provincial government. The proposed HST eliminates the current duplication of meeting separate requirements for PST and GST. B.C.'s businesses are expected to save $150 million annually in administrative costs under the new streamlined HST tax system.
Summary
The new HST Taxation system will introduce greater saving to PromoKeychain.com customers and improve your business's ability to purchase promotional advertising goods exempt of PST (provincial sales tax).
