Provincial Sales Taxes

The provinces of New Brunswick, Nova Scotia, and Newfoundland scrapped their sales taxes and joined forces with the Federal Government to impose a 15% Harmonized Sales Tax. After two rate reductions, the current rate is now 13%.

The Federal government administers this tax, which is identical to its 5% Federal Goods and Services Tax.  It retains its 5% portion and transfers the remaining 8% to the three provinces.

The province of Alberta has no sales tax.

The rest of the provinces charge a Retail Sales Tax (RST) on tangible personal property, and in Quebec, movable property. Also, the provinces charge RST on certain services and on repairs to tangible personal property.

Although the final consumer pays the RST, these provinces require vendors to charge, collect, and remit the tax.  The RST is destination based and sales to locations out of an RST province do not bear the tax.  However, people bringing goods into an RST province must calculate and remit the tax to the province.

Businesses do not pay the RST on goods they purchase for resale, but do pay it on goods they use in their business such as office equipment.  Some items may be exempt in one province, but not the other.  Some of the exemptions are: food, prescription drugs, children's clothing, and books.  However, you should review the exemptions allowed in the province of the purchaser.

The RST rates range from 6-10%.  However, Ontario has a lower rate for certain areas.

If you need more advice or help, please contact us.