Most business owners don’t understand new HST rules
The Ontario government's decision to harmonize the federal and provincial sales tax into a single 13% tariff should do wonders for the underground economy, predicts Cyndee Todgham Cherniak, a tax lawyer with Lang Michener in Toronto who tracks the changes on The HST Blog.
The new tax, which will take effect in July and apply to a much wider array of goods and services – vitamins, gasoline, plane tickets and Christmas trees, to name just a few – is such that just about everyone is going to want to start paying cash again.
Not that every analyst agrees: No group is significantly worse off or better off as a result of the province's HST plan, claims Ernie Lightman, a University of Toronto economist who co-authored a recent report entitled Not a Tax Grab After All: A Second Look at Ontario's HST.
In fact, the vast majority of Ontarians will either be slightly better off or unaffected by the tax changes, he maintains.
Which is good news in a way since, according to research from ING DIRECT, only 44% of the business owners affected by the switch fully understand the implications of this policy.
Which means more than half of Ontario’s businesses are either unclear about what’s going on or that they’re simply hoping that the HST won’t really apply to their operations.
Looking to remedy this, ING recently launched a useful primer called HST 101 for Business in tandem with the accounting firm Deloitte & Touche. The site includes both videos and a presentation deck of a recent Deloitte & Touche seminar entitled “10 things to know about the HST.”
If you’re one of those who’s expected to start collecting HST in a few weeks, it’s likely time to check it out.
Where do you stand? Will the HST changes affect you in any meaningful way?
By Gordon Powers, MSN Money