Harmonized Sales Tax
Harmonized Sales Tax, commonly referred to as HST, is a consumer tax resulting from the combination of the Canadian Goods and Services Tax (GST) and provincial sales tax (PST).
The HST is collected by the Canada Revenue Agency (CRA) which then remits the appropriate amounts to the participating provinces.
Ontario and B.C. implemented Harmonized Sales Tax (HST) July 1, 2010, joining Nova Scotia, New Brunswick, and Newfoundland and Labrador where HST has already been in effect since 1997.
The HST rate in all these provinces is 13% except for Nova Scotia, where the HST rate is 15% and B.C. , where the HST rate is 12%.
Four provinces still have provincial sales tax. The provincial sales tax rates of these provinces are:
- Manitoba: 7% Retail Sales Tax (RST)
- Prince Edward Island: 10% Provincial Sales Tax (PST)
- Saskatchewan: 5% Provincial Sales Tax (PST)
- Québec: 7.5% Quebec Sales Tax (QST)
Alberta, Yukon, Nunavut, and the Northwest Territories have no provincial sales taxes and therefore no Harmonized Sales Tax either. Consumers in those places are charged only the GST on taxable goods and services.
As an operator of a business in any of the provinces that has HST, it’s your responsibility to charge, collect and remit Harmonized Sales Tax as required. As with the GST, there is a Small Supplier exception; if your small business makes less than $30,000 annually, you are not required to register for GST/HST. You may want to register voluntarily, however, so you can claim Input Tax Credits on the goods and services you consume in the course of doing business.
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