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Harmonized Sales Tax (HST) discussion


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#41 Holden West

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Posted 24 July 2009 - 07:23 AM

I'd like the restaurant tax issue clarified. If it will cost more it will be a blow to the current dining out business. Slate.com asked its readers how they are cutting back during the recession and eating out was number one:

Sacrifices

Eating out 21
Travel 15
Salon/beauty products 13
My own place/future home 12
Shopping for fun 9
Cable 8
Going out to the movies 7
Health or car insurance 6
Coffee out 5
Peace of mind/sense of security or freedom 5
Having a child 3
Hobbies (pets) 3
Spontaneity 3
Hopes for retirement 2
Private school for my child 2
Time with my family 2

EDIT:

The Canadian Restaurant and Foodservices Association estimates the HST will result in a permanent drop of $750 million a year in sales in this province. On Vancouver Island alone, Monsour estimates the food-services industry has about $500 million a year in sales and employs 60,000.

There sure is a disconnect between that optimistic press release and the reality of this tax increase.
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#42 VicHockeyFan

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Posted 24 July 2009 - 08:16 AM

I understand how they say that there is lots of PST embedded in various manufactured products for many businesses, but quite frankly, it is NOT in food products. So I don't see how the restaurant business in general gets much savings from the harmony.

#43 rjag

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Posted 24 July 2009 - 08:50 AM

For me the jury is still out. Its early days and questions like those posed above need to be answered.

However this tax is no different than what we see pretty well everywhere else in the inductrialised world.

The UK has a 14.5% VAT, France I think is 18%, Some other countries have as much as 25%.

Even if there was a drop of 2% on the liquor tax as a result, I cant see too many restaurants altering their menu prices.

My business provides a service and is therefore for 99% of it, only charging GST. And we know that the GST is recoverable by business, they only pay the difference of what they collect compared to what they pay or are refunded. Will this be the same? Have to wait and see.

#44 spanky123

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Posted 24 July 2009 - 09:12 AM

I understand how they say that there is lots of PST embedded in various manufactured products for many businesses, but quite frankly, it is NOT in food products. So I don't see how the restaurant business in general gets much savings from the harmony.


This is more Government BS. Companies that purchase products for resale are PST exempt and thus there is no "embedded PST" in the price of the products that consumers pay. There are also exemptions for PST on goods used in the manufacturing process which may not even be resold.

The only benefit that I see to business are goods that are consumed but not resold (ie office supplies, furniture, fixtures, etc). For a larger business that may add up to a significant amount of PST but then it needs to be offset against the $1,200 a year the business will lose as a rebate for PST collection.

The TC published a list o things that would be less xpensive for the consumer with HST. The one item was booze and even then I would bet my last dollar that the price on the shelf stays the same and the retailers just absorb the extra profit.

#45 Roger

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Posted 24 July 2009 - 01:21 PM

The government is being misleading when representing how the HST tax rebates will work for new housing purchases. They are giving the impression that the rebate for homes under 400K will offset the new provincial component of the HST. What is actually being implemented is that new homes being purchased as primary residences, across all price ranges, will only qualify for a partial rebate of up to $20,000. The government claims new homes priced up to $400,000 will not be subject to additional tax if the purchase price is reduced by the current PST, which is currently embedded in the price of new homes. Even if the builder lowers the list price after July 2010 to account for PST savings, which is questionable, the impact of the new HST on consumers when they consider making a purchase will be dramatic.

The BC government is effectively using the same revised HST formula as Ontario even though our housing prices are much higher. The rebate would effectively apply the provincial portion of the HST at a rate of two per cent on the first $400,000 of the purchase price of a new home and at a rate of seven per cent on the portion above $400,000. Here is an example of the "sticker shock" a consumer will be facing when looking to buy a new 400K home:

Total HST : 48,000
GST rebate: 3,150
BC rebate: 20,000
Total Taxes Paid: 24,850 compared to 16,850 now
Increase of 8,000 which is a jump in total purchase price of 1.9%

What about a 575K house which is typical in Victoria?

Total HST : 69000
GST rebate: 0
BC rebate: 20,000
Total Taxes Paid: 49,000 compared to 28,750 now
Increase of 20,250 which is a jump in total purchase price of 3.4%

It is my belief that this is absolutely the wrong time for the BC government to be making another tax grab on housing in this province. BC has the worst affordability levels of any province in Canada and British Columbians are struggling with a recession. The dreaded property transfer tax (PTT) is already bringing in hundreds of millions of dollars of tax revenue and has not been indexed to reflect rising housing costs. Furthermore, PPT is calculated on the final purchase price, including all taxes. The HST will increase the final purchase price and therefore the buyer will pay more property transfer tax as well. In effect a tax on a tax. British Columbians deserve better than this from their government.

#46 Roger

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Posted 24 July 2009 - 01:24 PM



#47 Rob Randall

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Posted 29 July 2009 - 11:15 PM

On C-FAX today I said I'd feel better if the housing component of the tax was made so that you got a tax credit if your house was carbon-neutral or if it was an infill house that didn't contribute to urban sprawl, perhaps even full credit in certain circumstances. After all, the government has committed fully to environmental and urban density goals.

With regard to the restaurant aspect I thought it was strange to be spending tens of millions of stimulus dollars on area bridges to support the construction industry but penalize the restaurant industry at the same time. Restaurants are a core aspect of Downtown's economy. We have no factories, mills or farms Downtown. I said that with this new blended tax there are too many sticks and not enough carrots.

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#48 sebberry

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Posted 29 July 2009 - 11:21 PM

On C-FAX today I said I'd feel better if the housing component of the tax was made so that you got a tax credit if your house was carbon-neutral


Does the HST tax on homes only apply to new construction?

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#49 Bob Fugger

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Posted 30 July 2009 - 07:44 AM

Does the HST tax on homes only apply to new construction?


I believe that it applies to new construction and land.

#50 rjag

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Posted 30 July 2009 - 09:18 AM

I believe that it applies to new construction and land.


Thats correct, it adds a new layer of taxation to new housing and land.

One thing I cant find and hope someone can point me in the right direction, the Province is claiming $1.9 Billion in savings to business. I'd like to see where the savings are and how they came to this conclusion.

Also when Hansen says it will be revenue neutral it means the $1.9 billion in savings to business will be redeemed from the end user, the consumer. So the Province will still collect their pound of flesh.

I think the provincial Liberals have just signed their death warrant with this one.

#51 North Shore

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Posted 30 July 2009 - 09:52 AM

What gets taxed: PST-exempt goods and services to be subject to B.C.’s harmonized sales tax

GOODS

• Residential fuels (electricity, natural gas) and heating.
• Basic cable TV and residential phones.
• All food products (only basic groceries will remain exempt under new tax).
• Non-prescription medication.
• Vitamins and dietary supplements.
• Bicycles.
• School supplies (books will continue to be exempt).
• Magazines and newspapers.
• Work-related safety equipment.
• Safety helmets, life jackets, first-aid kits.
• Smoke detectors and fire extinguishers.
• Energy conservation equipment (e.g., insulation, solar power equipment).

SERVICES

• Personal services such as hair care.
• Dry cleaning.
• Repair services for household appliances.
• Household maintenance such as renovations and painting.
• Real estate fees.
• Membership fees for health clubs.
• Movie and theatre tickets.
• Funeral services.
• Professional services such as accounting and home care.
• Airline fares within Canada.


I always thought it would be in the government's best long-term interest to have a healthy, safe, and educated population, and that taxation could be best used to promote behaviours that are good for us, and discourage things that are bad. Well done Gordo and friends: bikes, health clubs, safety equipment and school supplies - all subject to new taxes..:rolleyes:

I wonder if a satellite dish for Tv is subject? What about ditching my home phone in order to get a cel? how about a woodstove?
:D here I go... spending $2500 to save $100 in taxes!

Edited to add: As someone mentioned above, I never, ever, expected a right-wing government to claim that raising taxes was good for the economy!
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#52 AnonAnnie2

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Posted 30 July 2009 - 11:46 AM

Ohkay, this tax I don't like now! Nasty bit of tax it is!

Come to think of it, I dislike all taxes hmmmm....
I wonder, if they announced any kind of new/old tax if I would jump-up-and-down? no, probably not.

So. Here we have a BIG bill we have to pay...
which tax should be increased?
what new tax shall we introduce?

just say'n.

#53 Mike K.

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Posted 30 July 2009 - 12:51 PM

The Globe recently ran an article about the restaurant industry claiming $500 million in losses due to the tax. The BC Libs are set to work with the industry and either tweak the tax or propose some form of kickback.

And the article also mentioned that Ottawa is giving BC $1.6 Billion to help smooth the transition.

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#54 martini

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Posted 30 July 2009 - 01:19 PM

I think the provincial Liberals have just signed their death warrant with this one.

Well it took that long for the American voters to clue in and vote Bush out.
We're only in the beginning of the next four years. I can't imagine the damage that will be done in that time.
Look at what they've done in three months.

#55 sebberry

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Posted 30 July 2009 - 02:23 PM

The Globe recently ran an article about the restaurant industry claiming $500 million in losses due to the tax. The BC Libs are set to work with the industry and either tweak the tax or propose some form of kickback.

And the article also mentioned that Ottawa is giving BC $1.6 Billion to help smooth the transition.


Just shows you how much crap this all really is. Already fixing something that was designed to be good... :rolleyes:

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#56 martini

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Posted 30 July 2009 - 04:03 PM

Here's the online petition link:
http://www.bcndpcaucus.ca/en/node/2748

#57 Mike K.

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Posted 30 July 2009 - 04:06 PM

Does the NDP regularly launch online petitions against the Liberals?

There is also an independent petition available here, as linked to from the VV blog post on the HST.

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#58 martini

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Posted 30 July 2009 - 04:10 PM

Does the NDP regularly launch online petitions against the Liberals?

There is also an independent petition available here, as linked to from the VV blog post on the HST.

I don't know. Maybe this is a first.

Thanks for the link.

#59 VicDuck

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Posted 30 July 2009 - 10:31 PM

Well when i go out to eat after this tax is instated, i'll give a smaller tip to make up for what i'm losing with this tax.

#60 martini

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Posted 30 July 2009 - 10:38 PM

Well when i go out to eat after this tax is instated, i'll give a smaller tip to make up for what i'm losing with this tax.

You and the majority of British Colombians I'm sure.

These will be the front line casualties.

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