The proposed Harmonized Sales Tax (HST) that is scheduled to come into effect July 1, 2010 has been causing some concern among horsepeople. The HST combines the GST (5%) and the PST (8%) for a total HST (13%).

OHRIA has been assured by the office of Hon. Dwight Duncan, Ontario Minister of Finance and Revenue that in most instances there will be no change regarding the implementation of the new HST as it relates to the horse racing industry. As an example, horsepeople who currently claim recovery costs for GST (5%) regarding the purchase of horses, training fees etc. will be allowed to recover the full HST (13%).

The HST as it relates to racetracks is a little more complex but generally speaking businesses selling taxable or zero-rated goods and services would be able to claim input tax credits on their purchases, as under the federal GST, with limited exceptions. These credits would reimburse businesses for the tax they pay in the course of commercial activities. This approach would reduce business costs, most noticeably in areas that are taxable under the current RST system.

Also the proposal including cutting the corporate income tax (CIT) rate for small businesses from 5.5% to 4.5% effective July 1, 2010.

If you require any further information feel free to contact the OHRIA office.

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