News Release Archive
FINANCE--WHAT ITEMS WILL BE TAXED MORE? LESS? THE SAME? ----------------------------------------------------------------- NOTE TO EDITORS: BACKGROUNDER ON THE HARMONIZED SALES TAX The new Harmonized Sales Tax (HST) means some items will be taxed more, some will be taxed less and some will remain unchanged. In fact the biggest items in a consumer's shopping basket remain unchanged. People currently pay no sales tax on basic groceries, mortgage interest and residential rent. That will not change. The tax is not charged for medically-based home care, dental services, day care and babysitting. Publicly operated transit services and tuition for post-secondary education is also sales tax free now. Businesses selling less than $30,000 a year do not charge the Goods and Services Tax (GST). In fact, nothing that is tax-free under the GST, will be taxed under the HST. Some items and services will cost less under the HST. That's because right now they are taxed by both the GST and the Provincial Sales Tax (PST) at a combined rate of 18.77 per cent. The new HST rate is 15 per cent. The tax reductions apply to some services such as automobile and equipment repairs, cable and telephone, including long distance. But, the most significant reductions come when people buy goods. Everyday household items including supplies such as light bulbs, kitchen utensils, soaps and detergents, garbage bags, toilet paper and paper towels, and batteries; personal items such as shampoo, razor blades, and cosmetics; non-prescription drugs for common aliments such as colds, allergies and upset stomach aches; household maintenance items such as gardening and hardware tools and supplies, paint, wallpaper, lumber, and other building materials, will all be taxed less. The tax on entertainment will also go down. The Amusement Tax will also be harmonized with the GST and the PST. Movies, video rentals, commercial sporting and music events will be taxed less. The HST means a lower tax on beer, wine and liquor at the Liquor Commission or in a restaurant, lounge and tavern. Lunch or dinner will be taxed less if you eat out or have it delivered to your home. And, finally, expensive, long lasting items such as new cars, televisions, VCRS, and other appliances, furniture, lamps and rugs, bedding and towels, curtains and blinds, bicycles and other sporting goods and equipment, toys and games will also be taxed at a lower rate. As a result of government decisions the tax on books will remain at 7 per cent, there will be rebates to make sure the tax raised on new home construction remains the same, and tobacco taxes are being adjusted to make sure harmonization has no impact on the price of cigarettes. Harmonization does mean an increase in taxes for some important goods and services. Home heating fuel will see a tax increase as will gasoline. The tax on electricity goes from 10.2 per cent to 15 per cent on April 1. Clothing of all kinds will have one tax rate at 15 per cent. That means a tax rate increase for clothing under $93.46, a tax rate decrease for items over that amount. Personal services such as haircuts as well as business services such as legal and accounting services will also be taxed more. Private, for-profit homemaker and maid services when done by a registered business, as well as dues for golf, yacht, and other clubs will also have a tax increase. Planes, trains and buses within Nova Scotia, New Brunswick and Newfoundland will be taxed more as will travel to the rest of Canada. International travel is unaffected. Travel to our region will be taxed the same. The rule will be if the trip begins in our region it will be taxed at 15 per cent, if it begins outside the region it will be taxed at 7 per cent. -30- Contact: Bruce Cameron 902-424-8787 trp Mar. 26, 1997 - 8:55 a.m.