HST TAX IN ONTARIO

What is the HST Number?
Most persons and organizations engaged in commercial activities in Canada who have worldwide, taxable sales of more than $30,000 over any four or fewer consecutive calendar quarters must register for and collect the Harmonized Sales Tax (HST). All taxi and limousine operators must register for HST, regardless of their revenues.

What is the Federal Business Number (BN)?
The BN is issued by the Canada Revenue Agency (CRA) and is used to unify all accounts a business may have with the federal government. The BN is used to operate corporate income tax, import/export accounts, payroll deductions and GST/HST among others.

When should I apply for the Federal Business Number (BN)?
Registration should take place after the company has been registered. We can assist you with both, the business registration and the HST registration at the same time.

General Information about HST
The HST applies to most transactions from manufacturing to marketing and sales. Businesses and organizations registered for the HST are referred to as registrants.

In general, a harmonized sales tax rate of 13% applies to most goods and services.
The HST is not charged on the following items:

• Basic groceries
• Prescription drugs
• Some medical devices
• Municipal public transit
• Health and education services
• Legal aid
• Most financial services
• Child care
• Tutoring
• Music lessons
• Residential rents

Businesses do not collect the provincial portion (eight per cent) of the HST for:

• Qualified prepared food and beverages sold for a total of $4 and under
• Print newspapers
• Children's clothing and footwear
• Children's car seats and car booster seats
• Diapers
• Feminine hygiene products
• Books (including audio books)

HST registrants who provide taxable goods or services have to charge and collect the HST on their sales. If the HST collected is greater than the HST paid or payable, the difference is sent to the CRA. If the HST collected is less than the HST paid or payable, a refund can be claimed.

Do I need to register for HST (Harmonized Sales Tax)?
While it is not mandatory for most businesses to register and collect HST until 29 days following the single calendar quarter or four consecutive calendar quarters in which they first exceed worldwide sales of $30,000, we generally recommend that any business register as soon as possible.

Three reasons to register:
1. Unless you are an HST registrant you cannot claim HST input tax credits (HST paid on business expenditures). If you are an HST registrant and your input tax credits exceed HST collected on sales, you may claim a refund of the excess from Canada Revenue Agency. If you're not a registrant the HST paid on expenses is included as part of the expense when computing net income.

2. Not being registered for HST tells everyone that you are running a truly small business. (Your sales are below $30,000 per year) If your customers are other businesses, they expect to pay HST.

3. Companies that are required to register for HST must remit the HST tax to Canada Revenue Agency - even if it has not been collected from the customer. By registering for HST upon starting your business you will eliminate the possibility of inadvertently surpassing the $30,000 threshold and being exposed to penalties and interest charges for noncompliance

You have two options when registering for an HST number:

Option # 1
You can always visit your local Canada Revenue Agency office and complete the registration form. Please make sure that you fully understand the questions on the registration form and answer them correctly. It is quite difficult to change certain information once it is recorded. (You may have to wait for up to one year). Also, be prepared for delays due to the workload.

Option # 2
We can easily assist you with registration. You can visit our office or submit your information via fax or e-mail. If you are wondering why you should let us help you with registration, the answer is simple.

• You do not have to take any time from your busy schedule to do the registration.
• If you are located in a small town, there is no need to travel, just order online.
• We have the expertise to complete the registration in the way that best suits your needs.
• We work for you, not the government.
• For a small fee of $35.00 we will do all the necessary work for you.
• We can help you with the next step - HST report preparation.

Submit your HST registration online.

Download Consent form in pdf format.

As always, it is up to you to decide to do the work the easy way or the hard way. In any case, we are always available to answer your questions. Feel free to contact us by e-mail or telephone, at the numbers listed below.