Harmonized Sales Tax -
Tax Tip
10
Published: May 2010
Content last reviewed: April 2011
ISBN:
978-1-4435-2421-6 (Print), 978-1-4435-2423-0 (PDF), 978-1-4435-2422-3 (HTML)
Notice to the reader: On July 1, 2010 the 13 per cent Harmonized Sales Tax (HST) took effect in Ontario and is administered by the Canada Revenue Agency (CRA). For up-to-date information about the HST, visit the CRA website or call 1 800 959-5525.
This publication was archived and kept for historical purposes. Use caution when you refer to it, since it reflects the law in force at the time it was released and may no longer apply.
This information supplements the information on the point-of-sale rebate for newspapers in the More Point-of-Sale Exemptions for Ontario HST Backgrounder
The Harmonized Sales Tax (HST) is one part of the comprehensive tax package announced in the 2009 Ontario Budget. In addition to the HST, the comprehensive tax package is also delivering more than $4.6 billion in tax relief to business and $11.8 billion in tax relief to people over three years.
Together with the other tax measures, the HST will help make Ontario more attractive for new business investment and allow existing Ontario businesses to improve their competitiveness. A recent report estimates that within ten years, the benefits from the lower tax burden on new investment will lead to $47 billion in increased capital investment, higher annual incomes of up to 8.8%, and 591,000 net new jobs in Ontario.
On November 12, 2009, the Ontario government announced it will provide a point-of-sale rebate of the provincial component of the HST for newspapers. The HST for Ontario will have a combined rate of 13 per cent – combining the existing five per cent federal Goods and Services Tax (GST) with an eight per cent Ontario component.
The point-of-sale rebate will be similar in nature to the current Ontario Retail Sales Tax (RST) exemption for newspapers.
Newspapers that will qualify for the Ontario point-of-sale rebate are print newspapers that contain news, editorials, feature stories or other information of interest to the general public, and that are published at regular intervals (typically on a daily, weekly or monthly basis), but not flyers, inserts, magazines, periodicals and shoppers.
Electronic and digital publications will not qualify for the point-of-sale rebate.
This will replace the definition of newspaper used for the current Ontario RST exemption, including the point-system approach in subsection 1(2) of Regulation 1013 to the Retail Sales Tax Act.
As under the current Ontario RST exemption for newspapers, the point-of-sale rebate of the Ontario component of the HST will not differentiate between newspapers sold on subscription, sold at newsstands or sold at retail outlets. The point-of-sale rebate will be applicable to newspapers sold in Ontario by all methods and at all places so long as the newspapers meet the definition of qualifying newspapers above.
Vendors will automatically provide purchasers with the point of sale rebate, crediting the Ontario component of the HST and only collecting the five per cent federal component of HST on the sale of qualifying newspapers.
This rebate is available at any point in the distribution chain on supplies of tangible personal property related to a qualifying newspaper. The availability of the rebate does not depend on whether the publisher picks up the newspapers from the printer or the printer delivers the newspapers to the publisher or to another party. Furthermore, when the printer assumes responsibility for the shipping and handling of the newspapers, the shipping and handling fees are considered to be part of the price of the newspapers, even if they are invoiced as a separate item. As a result, the rebate is also available in respect of these fees.
Charges for other specific services, like graphic design related to the supply of a qualifying newspaper, may be eligible for the rebate if they are considered to be part of a single supply of the newspaper. The determination of whether a transaction consisting of several elements, such as printed newspapers and graphic design, is to be regarded as a single supply or multiple supplies is a question of fact. When a printer or publisher is not certain about the application of the rebate they should contact the Canada Revenue Agency's GST/HST rulings service.
The Canada Revenue Agency administers the HST. Visit their website at www.cra.gc.ca/gsthst or call 1 800 959-5525 for more information.
