HST in BC

Before July 1, 2010 On most goods purchased in BC there was a 7% Provincial Sales Tax (PST) and a 5% Federal General Sales Tax (GST) Some things like basic groceries had no GST and no PST charged on them Others like newspapers, snack foods and taxis only had the 5% GST charged on them Businesses paid PST on the things they bought

After July 1, 2010 The two taxes were merged into a 12% Harmonized Sales Tax (HST) Those things which were not taxed with the GST or the PST were still not taxed by the HST Most of the things which were only taxed by the 5% GST were taxed with the full 12% HST. Businesses did not pay HST on the items they bought

Benefits Having only one system makes it much simpler for businesses, and saves the provincial government the hassle of collecting PST Tax is only charged once on an item, not at every step of its production. – Example: A mill does not have to pay tax on the logs it buys under the HST The federal government gave us 1.6 billion dollars

Problems The tax on many items increased, these include: Books School supplies Snack food Basic Cable TV Household renovations Taxis Vitamins Movie Tickets MP3s downloaded electronically Hair styling Cigarettes

Questions Under the PST system a haircut would have a 5% GST added to it. Under the HST system that same haircut has a 12% HST added to it. How much more do you pay on a $15 hair cut? OLD: 15 x 0.05 = 0.75, you would pay $15.75 NEW: 15 x 0.12 = 1.8, you would pay $16.80 $ $15.75 $1.05 You pay $1.05 more on a $15 hair cut

Questions Under the PST system a movie ticket would have a 5% GST added to it. Under the HST system that same haircut has a 12% HST added to it. How much more do you pay on a $8 movie ticket? The difference in the taxes is 12% - 5% = 7% You will pay 7% more. $8 x 0.07 = $0.56 You pay $0.56 more on an $8 movie ticket

Other Percentage Questions John sells flowers, he buys them from a wholesaler and then increases the price 25% to determine his selling price. This is called a markup. If John buys some roses at the price of $1.78 each, how much will he sell each of them for? 1.78 x 0.25 = = John will sell the roses at $2.23 each