The HST Blog : Canada Harmonized Sales Tax Lawyer Cyndee Todgham Cherniak for Assessments, PST & RST Issues in Ontario, British Columbia & Quebec

The HST Blog asks you to comment on whether you have received your HST Small Business Transition Support cheque.  The Ontario government has advertised in HST Tax Tip #7 that small and medium sized businesses (sales less than $2 Million in the tax year 2009) that they will be receiving an HST transition support payment up to $1000 in "the fall of 2010".  Well, the leaves are colourful and it is officially fall of 2010 - where are those government cheques?

The entitlement criteria are:

•not be a listed financial institution under the Excise Tax Act (Canada);
•carry on business in Ontario and have been a GST/HST registrant on July 1, 2010;
•make GST/HST taxable supplies (including zero-rated supplies) in the course of carrying on business;
•have a premises in Ontario where it conducts its business; and
•have taxable revenue of less than $2 million in a 12-month period. 

I have spoken with  number of small businesses and no one I have spoken to has received a cheque.  Please comment on whether you are still waiting for your government cheque.  This is our way of helping keep the government accountable.

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I was sent a question as to whether harmonized sales tax (HST) will be imposed on imported goods that have been the subject of a bequest to the importer.  I wanted to answer this question since my own Grandmother passed away this year --- so this one is for Alice (and the writer of the question).

Goods that are classified under H.S. tariff item 98.06 may be imported as a non-taxable importation (in other words, no HST on importation).  H.S. tariff item applies to:

(a) Personal and household effects of a resident of Canada who has died (on the condition that such goods were owned, possessed and used abroad by that resident);

(b) Personal and household effects received by a resident of Canada as a result of the death or in anticipation of death of a person who is not a resident of Canada (on condition that such goods were owned, possessed and used abroad by that non-resident), or

(c) ll the foregoing when bequeathed to a resident of Canada.

It will be important to communicate effectively on the import documentation that the goods are the subject of a bequest (or belonged to a resident of Canada who passed away while outside Canada).  Please use H.S. tariff code number 98.06 on the Customs invoice. It will be helpful to name the deceased person and/or the estate of the deceased person.  If the goods are the subject of a bequest, be prepare to provide to a Canada Border Services Agency officer a copy of the Will or the Receipt and Release that identifies the goods that are the subject of a bequest. 

If the goods belonged to a Canadian resident who passed away abroad, the goods should be listed by the coroner or an official in the foreign jurisdiction as belongings of the deceased person.  There will be many situations where such documentation is not possible.  In such cases, a reasonable attempt should be made to corroborate that the criteria of the H.S tariff code have been satisfied.

Please remember that this H.S. tariff code has been misused by some and that is why your difficult time is going to be the subject of an inquiry by CBSA officers. 

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Service providers should not make a determination of the place of supply for harmonized sales tax (HST) and applicable HST rate once at the beginning and not revist the analysis.  As a technical matter, the legislation requires that service providers make a determination for each billing period because the relevant facts may change from invoice to invoice.  For example, the types of services may change from billing period to billing period, which could affect the application of the HST place of supply rules.  If there is more than one office or home address provided by the client, the location most closely connected with the supply may change from invoice to invoice.

The advice is do not follow the Ronco advice "Set It and Forget It".  Canada Revenue Agency auditors are being trained to look into the details of each invoice and look at changes.

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