Although Ontario officially harmonized the provincial sales tax with the federal GST on July 1st to create a new 13% HST on most taxable goods and services, the Retail Sales Tax was not eliminated in all areas:

Under the old GST rules, charities and qualifying non-profit organizations could claim a rebate of 50% of the GST paid on purchases. It was relatively easy to set up Quickbooks and Simply Accounting to track the 50% refundable portion and record the non-refundable portion in the expense on each purchase by manipulating the settings for the GST and PST tax codes.

The Small Business transition support payments are beginning to be received by our clients.

August marks the first month of HST filing for monthly filers reporting for the period July 1 to July 31, 2010.

The HST rate in Ontario has increased from 5% to 13% which means the risk exposure has increased on transactions where HST should be charged. An area of particular concern is payments to related parties, to ensure that circumstances qualify where no tax is collected on the transaction.

One of the biggest changes at the transition date is the change to interprovincial place of supply rules. The emphasis has moved from the location of the supplier to the location of the recipient.