You may have noticed that taxes in Canada have had a makeover. Here's the basics from a CBC News Article Ontario artists mull HST exemption.

'Ontario artists hope the province's change to a harmonized sales tax in July will allow them to spend less time on paperwork and more on their creations.

The HST merges the five per cent federal goods and services tax with the eight per cent provincial sales tax, but the Ontario government has also included some exemptions for small businesses when collecting the tax.

Under the new HST rules, small business owners earning 30,000 or less in the last year are not required to register and collect the tax.

For painters, sculptors and other visual artists, many of whom make well below the $30,000 threshold, the change takes away an added stress.'


To get a little more specific about how to collect HST from your clients and/or galleries Cheryl Fraser from Zilberschmuck Gallery lets us in on the details in a Facebook discussion, "According to my accountant, if you didn't collect GST before the July 1st change you do not collect it now until the government tells you to start doing so. So in Kasia's case, (selling less than 30K) she doesn’t collect the HsT from the gallery, they will remit it from the sales.
If you apply for a HsT number you can use the HST that you paid on purchases for your business like paper and toner for your printer. In the past you could only write off the 5% GST, now you can daim the PsT portion, an extra 8% and subtract that 13% from the HsT that you have to remit to the government on your sales It’s more paper work but run the numbers, it may be worth it for you.
For me it is an invoice nightmare. My current inventory and sales program only has two tax allocations, it's a pain, because I have to do all the 13% artist invoices, change the tax value, do Quebec and Albertan artists, change again for the others and then if a customer comes in while I’m in the middle ts a hassle to change it back. I just wish all the provinces and the kds would use one tax system for everyone. whew! Enough said:)"



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Sheryl then went on to say, "Well, I had a Quebec artist who's accountant said that Ontario galleries owed the artist 13% on sales. After several more hours investigation here is the correct answer.

The first people I spoke to at the tax office gave me information as if I were a sales agent and artist's work at a retail price and I subtract all the expenses like advertising, commissions, receptions etc., but because of the way the business is set up that does not apply and we have a two tier relationship.

In our case the goods remain the property of the artist until I sell it to a customer, at that time 2 sales occurs. I now own it and the customer owns it. Both sales, the wholesale and the retail, occurred in Ontario, so they are both subject to the HST. Even if the artist is from a different province, like AB, BC or NS that doesn't have a provincial sales tax or a different HST value, I still pay them Ontario HST of 13% and they put the 13% collected on sales into their remittance to the government.
This is so much easier for me now as everyone is one tax rate of 13%. Yes. It makes my life easier."

So there you have it. Please feel free to post your HST experiences and what you know about it. We all know taxes are a LOT of fun. :)

Happy HSTing!




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