The Ontario Government will continue its sales tax exemption for Status Indians for off-reserve goods under the Harmonized Sales Tax system, beginning September 1, 2010.
The point of sales exemption will follow the same practice of the provincial government’s Retail Sales Tax for those goods and services purchased off-reserve by Status Indians. Retailers are to provide an eight per cent credit at the time of sale (which is the provincial share of the 13% HST) for the category of off-reserve supplies. As with the current RST regime, business will be required to declare the total amount of the provincial portion of the HST that they did not collect in their tax return, which gets sent to the Canada Revenue Agency.
For the period starting July 1, 2010 through to August 31, 2010, First Nations customers will be required to pay the full amount of the HST at the point of sale, and later make the request to be refunded by the Ontario government.
Over time, the OCC has long encouraged the Ontario government to implement a harmonized sales tax regime in the province. The OCC recognizes that harmonization results in a simplified and more efficient tax system/fiscal regime, comprising one set of sales tax forms, one set of operating rules and one tax administration. It also makes most business to business transactions ’sales tax free’, as sales taxes paid will be eligible for an Input Tax Credit by the business.
For more information, please contact Mirko Palmesi, Policy Analyst, at (416) 482-5222, ext. 233 or mirkopalmesi@occ.on.ca.
