• The H.S.T. and Music Central

    Date: 2010.04.05 | Category: Music Central News | Tags: ,,,

    Recently I spent a day learning about the new Ontario Harmonized Sales Tax (H.S.T.) and how it will affect our company and our clients.  Normally spending hours learning about such things wouldn’t necessarily be my cup of tea but I must say that both Revenue Canada and the Ministry of Finance put on a really good event.  I was fortunate enough to have some one on one time with not just one, but two Revenue Canada representatives and asked some very detailed questions specific to Music Central Inflatable Ball.  Although the new tax is pretty straightforward, there are some details in the initial integration and transition that you should be aware of.

    Given that we are a service, the H.S.T. is going to come into play in a big way.  Please note that these details are specific to our company and how we have handled our accounting in the past so therefore may not be an accurate representation of other companies practices.  Here is the breakdown:

    1. As of July 1st we will be charging 13% (H.S.T.) on all our services versus the 5% we charge now.  This represents the merging of the P.S.T. and G.S.T. on services that were prior to this exempt from the provincial tax.  Just a reminder to our corporate clients that they will be able to use the entire amount as an input tax credit.

    2.  IMPORTANT IF YOU WANT TO AVOID THE NEW INCREASE!  If you have not yet booked for an event being held after July 1st, you must do so BEFORE MAY 1st.  That means that a verbal go ahead must be given prior to that date so that the paperwork can be sent out with an April 30th or before date.  As far as a deposit, it can arrive later but we need confirmation prior to May 1st.

    3.  If you have not booked yet, but your event is prior to July 2010 then you only have to pay the G.S.T. (5%).

    4.  If you have already booked with us for a date after July 1, 2010 and paperwork has been sent out with just the G.S.T. then you will continue to pay just the G.S.T..  An advantage for booking early!  If you have yet to send your deposit in please do so as soon as possible to make things official.

    When I originally heard the Ontario governments plans to implement this harmonization I was concerned.  The Disc Jockey business has and always will have a large ’cottage industry’ componant to it.  There are alot of legitimate single operators who because they may make under the $30,000 in annual business revenue do not have to apply for this.  And there are also alot of not so legitamate people as well (another blog for another time).    I had a very frank discussion regarding this with the Revenue Canada people and they are aware that this may escalate the underground economy even further.  We will counter this by continuing to provide an excellent service and striving to give more than required (the extra 10% as I like to tell the team).  We will continue to explain the advantages of working with a multi-op company.  And, there maybe, for a period of time, an offer, some kind of discount, to soften the blow of the increase.  We are still giving this serious thought and will be sure to let you know by May, though just a heads up, that the advantage will still be to book prior to May 1st.

    Hope that clears things up at least as far as our part with the new harmonized tax.  As always feel free to contact us with any questions.

    Here are a few links to check out:

    Preparing for the HST – What You Need to Know Checklist

    cra-arc.gc.ca/harmonization

    ontario.ca/taxchange

    http://www.cra-arc.gc.ca/gncy/hrmnztn/on/menu-eng.html

    Thanks,

    Rob

    Manager

    Questions?
    feedback.rev@ontario.ca or call 1 866 ONT-TAXS (1 866 668-8297)