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 $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. You pay $0.56 more on an $8 x 0.07 = $0.56 $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 = 0.445 John will sell the roses at 1.78 + 0.445 = 2.225 $2.23 each