Victoria has released its proposed transition rules for the harmonized sales tax (HST) set to replace the province's existing sales tax regime July 1, 2010.
Generally, the HST will begin to apply on May 1, 2010 for any prepayment of goods and services provided on or after July 1, 2010.
Businesses, however, will need to be careful how they calculate their taxes next year as the PST will apply for taxable products and services up to June 30, while the HST will apply starting July 1. Leased goods will be taxed in this way as well.
The HST, however, will not apply to a service where more than 90% of the service was performed before July 2010, in which case, the PST will apply for the entire cost of the service.
Several products and services, however, will have specific rules applied. For example, the HST will not apply to newspaper and magazine subscriptions paid for before July 1, 2010.
It will generally not apply to round-trip tickets for trips beginning before July 1, or for funeral services where the contract was entered into before July 1.
Construction materials purchased before July 1 will receive a rebate for the PST embedded in the material's cost.
Detailed information on the transition rules are available at www.gov.bc.ca/hst.