INFORMATION BULLETIN

2009TCA0009-000376 September 21, 2009

Ministry of Tourism, Culture and the Arts

 

FIVE FACTS ABOUT TOURISM AND THE HST

 

VICTORIA – The Province proposes to harmonize its provincial sales tax (PST) with the federal Goods and Services Tax (GST), resulting in a Harmonized Sales Tax (HST) of 12 per cent as of July 1, 2010. Here are some facts about the impact of the HST on the tourism industry in B.C.:

 

1.      Consultation with industry:  To help support tourist communities and regional destination marketing organizations, the two-percent AHRT (Additional Hotel Room Tax) that some tourist communities have in place will remain until at least July 2011. This gives the Province time to consult fully with the tourism industry on how to fund regional destination marketing organizations.

2.      Destination marketing opportunity:  Government has committed an additional $39 million in 2009-10 to maximize the marketing opportunity that comes with hosting the Vancouver 2010 Olympic and Paralympic Winter Games.

3.      More competitive:  Under the HST, the provincial sales tax on hotel rooms will drop from the current eight per cent to seven per cent, saving tourists money. The HST will also bring B.C.’s sales tax in line with five other provinces and more than 130 other countries, although at a lower tax rate.

4.      Streamlined:  Restaurants and attractions can expect to benefit at the “back end” of their businesses - from a more efficient and streamlined tax system, which will considerably lower administration costs and reduce paperwork.

5.      Lower costs:  Under the current PST system, businesses pay the PST on many products they use in the course of providing goods and services (e.g. linens, buses, brochures, uniforms, signage, etc.). Under the HST, businesses providing taxable goods and services can claim input tax credits. This removes the tax from business costs, lowers prices for the business owner, and allows for savings to be passed on to the consumer.

 

In addition, Budget Update 2009 raises the small business corporate income tax threshold to $500,000 from $400,000, effective January 1, 2010 — the highest threshold in Canada, and a 150 per cent increase since 2002.

 

B.C. also intends to reduce the small business corporate income tax rate to zero by April 1, 2012. In 2008, the rate was reduced from 4.5 per cent to 2.5 per cent — a reduction of 44 per cent.

 

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Contact:

Rena Kendall-Craden Communications Director 250 356-9869

For more information on government services or to subscribe to the Province’s news feeds using RSS, visit the Province’s website at www.gov.bc.ca.