Uploading or Downloading: You, Me and the HST
I spent some time this morning trying to sort out the question of prepaid death expenses with someone in the Ministry of Finance in Victoria. It was both humorous and at the same time frustrating conversation. My concern is with when it would be necessary to pay the HST on such services, May 1, as was recently quoted in the local papers, or July 1, as the agreement generally reads.
The fundamental question revolves around the difference between when a good or service is paid and delivered relative to when it is contracted. Both our provincial and federal governments want to ensure that devious citizens cannot outwit their clutches by contracting before July 1, 2010 for goods or services which will not be delivered and paid for, until after July 1. One can understand the logic of this strategy –except in the case of burial expenses. One really doesn’t want, in order to save the 12% in HST taxes, to be forced to die before July 1, an act which one hopes is, in the end, involuntary.
It appears from my conversation this morning that the answer depends on the accounting practices of the service provider and leans toward the July 1 deadline being the operative one, but no assurances were offered. A visit to the Ministry of Finance in Ottawa via the internet seemed to support this view.
But the upshot of all this was to confirm that, while the province and our municipalities complain of the downloading of the costs of services, in this case the province has found a means to upload the costs of PST collection by giving the responsibility to Ottawa through the HST. I was informed that one of the main savings to be made with the HST was the loss of BC government jobs associated with the PST. Of course the fact that we will all now be paying Peter instead of Paul to collect our taxes seems to be lost.
Whether government services are downloaded or uploaded, it is the same sheep being shorn, and shorn, and shorn……
Rod Mickleburgh in this morning’s Globe offers this clarification which should answer all your questions —
“Confused? The government has now explained the situation in lucid, unequivocal English:
“The Harmonized Sales Tax will generally apply to consideration that becomes due or is paid without having become due on or after May 1, 2010, for property and services provided on or after July 1, 2010, based on the general HST transitional rules under the federal Excise Tax Act.”
Clear? Or, as Hemingway might have written: “The Sum Also Rises.””
For whom the gnomes toll.
Here’s my 2 cents!
Ron: You say in your post, “One really doesn’t want, in order to save the 12% in HST taxes, to be forced to die before July 1,…”.
I think that you mean saving the 7%, (the provincial component of HST), don’t you?
As the HST applies to the funeral industry, that means that the industry is currently taxable under the 5% GST.
Have the following to share: After e-mailing an inquiry to
CTBTaxQuestions@gov.bc.ca, I received the following response from the Ministry of Finance:
“In general, the HST will apply to the same goods and services that are currently taxable under the GST. If there is currently no GST on a good or service, there will be no HST.
If there was 5 per cent GST on a good or service, there will generally be 12 per cent HST on that good or service, unless the good qualifies for a point of sale rebate of the provincial component of the HST. For more information on point of sale rebates (see: //www.sbr.gov.bc.ca/documents_library/notices/HST_Notice_002.pdf ).
The HST is imposed under federal legislation, the Excise Tax Act (Canada) and will be administered by the Canada Revenue Agency (CRA), not the province of British Columbia.
For information on the GST/HST, please see http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html?=slnk.
For information related to the transition to HST, please visit http://www.cra-arc.gc.ca/gncy/hrmnztn/menu-eng.html , or call the CRA’s General Business inquiry telephone line at 1-800-959-5525.”
Janet, you may be correct. I have neither died yet, nor paid for my funeral, so I am not sure whether death has always been taxed under the GST. In either event, a tax on a family at that time is out of place. If I die without a family they don’t pay and I won’t be in any position to care. If I have a family, it is hardly the time to gouge them. There should be at least one last legal act that one can perform without tax.
The list of items which will collect taxes under the HST which do not attract the 7% PST currently appears quite large. I don’t care which band of big spenders is collecting my taxes. The distinction between local, provincial and federal may shift but the sum is constantly increasing.
I sincerely hope that at least some ridings are able to collect the signatures of 40% of the eligible voters as this would indicate a sufficient number to recall an MLA. This would certainly set our politicians to considering their options.
For those,who may be interested in tax reform, the Provincial Government has recently posted the following document to its website:
“What’s Taxable under the HST & What’s Not?”
– Janet Irvine
Is the HST hit list released by the government iron clad?
Does it have a best before date?
Can we trust them?
Has anyone ever known an elected official to say one thing and then do another?
Most politicians have proven themselves so competent and trustworthy it is a surprise anyone would question what they say.
Remember this is the same bunch that passed a LAW making it illegal to run a deficit budget. ILLEGAL, remember!
Did they abide by their own LAW?