Families getting ready to enjoy summer picnicking and camping may be surprised how little their shopping bills will be affected when the HST goes live on July 1, 2010, explained Finance Minister Colin Hansen today.
"British Columbians may not be aware that the tax rate will not change for about 80 per cent of consumer spending with tax harmonization," said Hansen. "For most consumer spending, the tax rate will remain the same because the goods are either not taxable under the HST, are eligible for a provincial point-of-sale rebate, or they are already subject to the PST. We have put sample receipts on our website to demonstrate the effect of HST."
The sample receipts are pictured below.
There is currently no GST on basic groceries, and that won't change with the HST. Basic groceries include most of the food you buy at the grocery store, such as milk, eggs, bread, fruit, vegetables, fresh meat, poultry and fish.
"While HST will increase some costs for families, since 2001 the B.C. Government has reduced income taxes so that for most taxpayers, provincial income taxes have been reduced by at least 37 per cent," said Hansen. "We've also increased the basic personal income tax credit, and will provide a B.C. HST credit to about 1.1 million British Columbians to further address the impact of the HST."
With HST, only those food items subject to the five per cent GST today will be subject to the seven per cent provincial portion of the HST. Examples include sugar-sweetened drinks like pop, snack foods like chips and candy, and ready-to-eat products at grocery stores such as platters of cheese, cold cuts and other prepared foods.
Consumers will not pay the provincial portion of the HST on motor fuel for automobiles and boats, residential energy, books, child-sized clothing and footwear, children's car seats and car booster seats, and diapers.
Families stocking up for summer activities may find their shopping bills change very little with implementation of the HST on July 1, 2010. For tables showing a sampling of camping and picnic supplies before and after HST, visit http://hst.blog.gov.bc.ca/wp-content/uploads/2010/06/Backgrounder_HSTandShopping.pdf
For more information on the HST and what's taxable and what's not, visit www.gov.bc.ca/hst
This is a real conundrum.