What HST means for magazines

As of July 1st, Canada will roll out its new Harmonized Sales Tax: a
lovely name that essentially means the GST and PST will be crammed
together. So what? If you buy magazines in Ontario or British Columbia,
you’ll soon face a higher price at the newsstand.

Masthead Online has created a helpful QnA about HST that explains the provincial differences (some will adopt the HST, some won’t) and the new obligations facing magazine publishers across the country.

Here are a few of Masthead’s points:

How will the HST affect magazines’ newsstand prices in Ontario and B.C.?
In Ontario there will be no price change for single-copy magazine sales, which are already taxed by both the GST and PST. However, magazines on B.C. newsstands have a PST exemption, but will be hit with the full HST after July 1, adding seven percent to their price for consumers.

How will the HST affect magazine subscription prices in Ontario and B.C.?
“Magazine subscriptions are currently exempt from PST in both provinces. However, starting July 1 the HST will be applied to subscriptions, raising their cost by eight percent in Ontario and seven percent in B.C.”  

If I sign up a subscriber before July 1, 2010, do I have to charge the HST?
“It depends. If payment for a subscription of any length is made before July 1, the HST does not apply. Subscriptions will be taxed based on the rules in place at the time they are paid for, so payment must be received before July 1 to avoid paying the HST, this is important to consider for Ontario and B.C. publishers running “beat the HST” promotions.

A pre-HST “bill me” order that is paid after July 1 is HST taxable. Also, payments received after July 1 from monthly payment plan subscribers will be charged the HST.”

I’m an Ontario or B.C.-based publisher selling subscriptions across Canada. Do I have to charge the HST to subscribers in other provinces?
“It depends. You charge subscribers sales tax based on the local tax regime where the magazine is delivered. There are different rates for customers in HST and non-HST provinces, regardless of where the publisher is located.

If your magazine is shipped to a HST province, you must charge the customer their local combined rate. For example, if a B.C. publisher sends an issue to a subscriber in New Brunswick, the customer will be charged New Brunswick’s 13 percent HST.

In a split-tax province GST is always charged on subscriptions but PST may or may not apply based on the subscriber’s local tax regime. For instance, if an Ontario publisher ships a magazine to a subscriber in Prince Edward Island, the customer is only charged five percent GST, because magazine subscriptions are PST exempt in that province.”

Is anything exempt from the HST in the
two provinces?
Yes. Exemptions for the provincial component of the HST (eight per cent
in Ontario and seven percent in B.C.) are listed below for each
province. The five percent GST portion of the HST still applies to these
products.

Ontario exemptions:
•    Newspapers
•    Books
•    Prepared food and beverages under $4.00
•    Child products including car seats, diapers, clothes and footwear
•    Feminine hygiene products

B.C. exemptions:
•    Gasoline, ethanol, diesel, and biodiesel fuel for motor vehicles,
locomotive fuel for trains, marine diesel fuel for boats and aviation
and jet fuel for aircraft
•    Residential energy
•    Books
•    Child products including car seats, diapers, clothes and footwear
•    Feminine hygiene products