Q. What is the HST?

Subject to the approval of the Legislature of British Columbia and the Parliament of Canada the harmonized sales tax (HST) is the single harmonized value-added tax that will replace the GST and PST in British Columbia on July 1, 2010.

The HST will apply at a rate of 12 per cent to those goods and services that are subject to GST.

In other words, the PST will be eliminated and a 7 per cent provincial rate will be added to the 5 per cent GST.
This 12 per cent combined tax will be called the HST.

Q. Who will administer the B.C. HST?

The B.C. HST would be administered by the federal government in the same way that they now administer the GST and the HST in other HST provinces. The full cost of administration would be borne by the federal government.

Q. Will HST apply to the same things as the GST?

Goods and services that are taxable under the GST will be taxable under HST, except for the items eligible for a point of sale rebate on BC’s portion of the harmonized tax. Although there is GST on these items, the B.C. portion of the HST will not apply (i.e., you will not pay the B.C. portion of the tax).

Nothing that is currently exempt from GST will be subject to HST. If you do not pay GST on an item now, you will not pay HST after harmonization. GST-exempt items will be HST-exempt and zero-rated items for GST purposes will be zero-rated under the HST.

Q. Isn’t this a regressive tax that will place a heavier burden on those with low incomes?

The province proposes to introduce a new BC HST Credit to be paid with the current GST credit to help offset the impact of the tax on those with low incomes.

The maximum amount of the credit would be $230 for individuals with income up to $20,000, and $230 per family member for families with incomes up to $25,000. The maximum credit would be phased-out by four per cent of income above the thresholds. The credit will benefit over 1.1 million British Columbians.

For more answers to questions regarding the HST, click [ here ]