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Harmonized Sales Tax (HST) discussion


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#1021 Mike K.

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Posted 28 November 2013 - 10:33 AM

Funny you bring this up. I've been preparing our corporate tax documents and receipts for our accountant over the last few days and it suddenly struck me how everything became cheaper on April 1st of this year.

 

When you're staring at receipts from month to month and suddenly see a $728 recurring bill drop to $682.50 you realize just how much more the tax usurped.


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#1022 jonny

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Posted 28 November 2013 - 10:41 AM

Do you guys not claim ITCs?



#1023 Mike K.

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Posted 28 November 2013 - 01:34 PM

What do ITC's have to do with anything? I hated having to pay a higher tax throughout the year on everything. Whether or not I get the money back via ITC's that money could have been put to better use throughout the year rather than being forfeited with every purchase.


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#1024 jonny

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Posted 28 November 2013 - 01:41 PM

Do you know what an ITC is? You should ask your accountant what ITCs have to do with running a retail business. Do you make taxable sales? If so, your ITCs actually went down with PST and you are actually paying more tax now. Forget about negligible cash flow changes , it's the bottom line I'm talking about. You can claim ITCs on a monthly basis with your GST return, so any cash that "could have been put to better use" would be gone and back within at most two reporting cycles.


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#1025 crabbygit

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Posted 28 November 2013 - 06:44 PM

In July 2010 many businesses increased their products at the same time the HST became effective, Vancouver newspapers would be one example. In April 2013 the HST was removed many businesses took the opportunity to raise their prices before the HST was removed. One business I deal with was one, I no longer deal with that business as a result.

@Mike K the key word in your above comment I would say is "Usurped".



#1026 Mike K.

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Posted 29 November 2013 - 09:12 AM

Do you know what an ITC is? You should ask your accountant what ITCs have to do with running a retail business. Do you make taxable sales? If so, your ITCs actually went down with PST and you are actually paying more tax now. Forget about negligible cash flow changes , it's the bottom line I'm talking about. You can claim ITCs on a monthly basis with your GST return, so any cash that "could have been put to better use" would be gone and back within at most two reporting cycles.

We don't run a retail business nor do we make taxable sales. At the end of the year we get a credit on our income tax for taxes expended, but that's at the end of the year once our annual report is submitted and taxes are due. There's a million different things I could have done with that credit in the mean time, thank you very much :)

 

And I assume you run your own business and saw for yourself how the HST affected your bottom line, right?


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#1027 jonny

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Posted 30 November 2013 - 04:03 PM

We don't run a retail business nor do we make taxable sales. At the end of the year we get a credit on our income tax for taxes expended, but that's at the end of the year once our annual report is submitted and taxes are due. There's a million different things I could have done with that credit in the mean time, thank you very much :)

 

And I assume you run your own business and saw for yourself how the HST affected your bottom line, right?

 

Don't you sell posters? That's retail. The sale of posters in Canada would be a taxable supply. 

 

You can claim ITCs monthly on an HST/GST return. No need to wait for an annual return. 

 

As an accountant working in the industry I understand very well how ITCs work and the benefits of a VAT like GST/HST over retail sales taxes like PST. 


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#1028 Mike K.

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Posted 30 November 2013 - 04:23 PM

99% of our poster sales are to non-Canadian distributors and retailers, and 99% of the remaining 1% are taxable. The rest of what we do is also geared towards international clients -- maybe 1-2% of our sales are taxable.

 

We are as much a retail business as an oil refinery is a gas station.


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#1029 concorde

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Posted 30 November 2013 - 05:05 PM

Funny you bring this up. I've been preparing our corporate tax documents and receipts for our accountant over the last few days and it suddenly struck me how everything became cheaper on April 1st of this year.

 

When you're staring at receipts from month to month and suddenly see a $728 recurring bill drop to $682.50 you realize just how much more the tax usurped.

I saw just the opposite for my companies.  New computers, cell phone bills, office supplies, equipment, etc all went up by 7% since you have to build the cost of the PST into the net price

 

As a consumer I did see some things decrease mostly groceries and restaurant meals



#1030 jonny

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Posted 30 November 2013 - 08:10 PM


99% of our poster sales are to non-Canadian distributors and retailers, and 99% of the remaining 1% are taxable. The rest of what we do is also geared towards international clients -- maybe 1-2% of our sales are taxable.

 

We are as much a retail business as an oil refinery is a gas station.

 

The funny thing is, most businesses who complained about the HST were retailers who could receive all the HST they paid back on a monthly basis in the form of ITCs. 

 

Then of course there is the embedded double taxation PST causes business to absorb, and of course pass the cost on to their customers. On top of that we have two taxes, which causes all sort of problems with information systems (most information systems, for example, aren't built to handle two retail taxes as most jurisdictions do not have two taxes. Of course here we need to customize our systems, at additional cost, to handle both taxes). 

 

The biggest problem is compliance. The PST is such an absolute piece of garbage. There is absolutely nothing intuitive about its application. The only people benefiting are public servants who have jobs in the Consumer Taxation Branch of the Ministry of Finance and paper pushers like me who get the joy of  interpreting inane PST legislation to attempt to ensure compliance. People at the CTB can't even explain to you why the tax is applied the way it is, but of course if you apply it incorrectly they will be happy to levy penalties and interest on any amounts owing. 

 

Read through this bulletin and tell me with a straight face the PST isn't an absolutely insane tax. http://www.sbr.gov.b...ins/pst_206.pdf



#1031 Mike K.

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Posted 01 December 2013 - 10:16 AM

I don't have a problem paying 12% when buying a stereo, but I think we can all agree that when the tax at 12% became a blanket tax on all goods and services that hit people's pocketbooks.

 

God knows we pay enough liquor taxes in this province to not even need the PST ;)

 

Of course by now the HST would have been 10% but that was too little too late on behalf of a government that vowed to not introduce the HST during the elections. This whole mess could have been avoided entirely if the Liberals hadn't botched the process as royally as they did.


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#1032 crabbygit

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Posted 01 December 2013 - 02:07 PM


What many people missed and the media would never talk about, is that the PST is a provincially administered tax which is controlled by the the provincial legislature and benefits the provincial treasury.

The custodians(government of the day) whom BC voters elect and have at least minimal control over every four years control ALL aspects of the PST.. Once HST is firmly established provincial control is forfeited to the federal government.

The HST was a manipulated attempt by the federal(central)government to unlawfully gain control of the provincial tax. What would be next harmonize the municipal tax? I don't believe that is so far fetched.

#1033 VicHockeyFan

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Posted 01 December 2013 - 02:22 PM

 

God knows we pay enough liquor taxes in this province to not even need the PST ;)

 

Liquor tax went down 5% under the HST.


<p><span style="font-size:12px;"><em><span style="color:rgb(40,40,40);font-family:helvetica, arial, sans-serif;">"I don’t need a middle person in my pizza slice transaction" <strong>- zoomer, April 17, 2018</strong></span></em></span>

#1034 Mike K.

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Posted 01 December 2013 - 03:21 PM

5 percentage points or down by 5%?

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#1035 jonny

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Posted 02 December 2013 - 09:09 AM

The HST was a manipulated attempt by the federal(central)government to unlawfully gain control of the provincial tax. What would be next harmonize the municipal tax? I don't believe that is so far fetched.

 

This is so obviously not true it's barely worth responding to. I will note that:

 

a) I'm shocked it is unlawful as five provinces have harmonized and I haven't heard of a single Supreme Court case.

b) Obviously the federal government didn't gain control because the provinces are still able to change the provincial portion of the HST rate as we are seeing with Nova Scotia who is reducing their HST rate from 15% to 13%.

c) Other provinces have successfully negotiated exemptions of either the provincial portion of the HST or the whole HST for certain supplies. I have no idea why BC did not proactively do this to appease the masses.

d) Provinces still receive the revenues from the provincial portion of the HST.


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#1036 VicHockeyFan

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Posted 02 December 2013 - 09:20 AM

5 percentage points or down by 5%?

 

The rate went from 17% down to 12%.  However, the government also increased the retail prices at the store, so the average consumer saw no change in take-home liquor prices.  This also raised the prices for the reataurant/bar industry when they bought liquor for resale (bars and restaurants pay the very same price the consumer pays at retail stores).  But at the retail restaurant/bar pricing level, after markup, it should have meant a discount from pre-HST days.  


<p><span style="font-size:12px;"><em><span style="color:rgb(40,40,40);font-family:helvetica, arial, sans-serif;">"I don’t need a middle person in my pizza slice transaction" <strong>- zoomer, April 17, 2018</strong></span></em></span>

#1037 Mike K.

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Posted 02 December 2013 - 09:27 AM

I certainly didn't notice any price reductions. If anything prices went up year-over-year between 2011-2012 and 2012-2013. If there were any savings to be had they were sucked up by something else.

It's interesting to note how many things have remained priced the same taxes in despite the tax being reduced by well over 50%.

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#1038 crabbygit

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Posted 02 December 2013 - 03:12 PM

This is so obviously not true it's barely worth responding to. I will note that:
 
a) I'm shocked it is unlawful as five provinces have harmonized and I haven't heard of a single Supreme Court case.
B) Obviously the federal government didn't gain control because the provinces are still able to change the provincial portion of the HST rate as we are seeing with Nova Scotia who is reducing their HST rate from 15% to 13%.
c) Other provinces have successfully negotiated exemptions of either the provincial portion of the HST or the whole HST for certain supplies. I have no idea why BC did not proactively do this to appease the masses.
d) Provinces still receive the revenues from the provincial portion of the HST.


The Federal [Central] government of Canada has never in its history had the authority to "Direct Tax" the citizens of Canada that privilege is an exclusive right of the provincial legislatures.

The first usurpation of Direct Tax was "income Tax".

Before 1917 the federal government provided all its obligatory services to the provinces even though they did not collect "income tax" in 1917 the federal government approached the provinces "requesting" that they be allowed to tax the people in order to help pay for the first world war this can be researched but I can provide you with all the documentation going back to the Quebec Resolutions which were the foundation documents of the BNA Act. The second instance of direct taxation came in 1991 when the GST was introduced, and the third instance was in 2010 when the HST was introduced.

If the federal government had authority they would not have offered the residents of Ontario a $2000 cheque as bribe and they would not have offered the BC provincial government $1.6B as a bribe, rather they would have introduced HST uniformly over the entire country in one foul scoop!

#1039 crabbygit

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Posted 02 December 2013 - 03:39 PM



Page 3 of the Quebec Resolutions as written in 1866 these are authenticated and duly stamped.
documents from the Canadian archives.
quebec-resolutions-1866-page3.jpg

#1040 crabbygit

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Posted 02 December 2013 - 03:41 PM

A close up from the QR

Clearly at (5)the provinces provided that new central government could "raise money by all or any 'other' modes or system of taxation" I have more on this as there was some underhanded things done by John A. MacDonald when they reached London and redrafted without consent (the London Resolutions)

page-3-resolution-5-word-other.JPG

Edited by crabbygit, 02 December 2013 - 03:53 PM.


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