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Wednesday, May 05, 2010 Richmond Hill, ON: - Effective July 1, 2010, the Ontario tax system will be converted to a value-added tax structure to create a single sales tax to be administered by the Canada Revenue Agency. The combined Harmonized Sales Tax ["HST"] will be 13% consisting of a 5% federal portion [GST] and an 8% provincial portion [PST]. The 8% provincial portion will be added to all goods and services provided to which the GST has already been applied. In order to provide assistance to centres during the transition to the Harmonized Sales Tax [HST] the OMHA has communicated with Association Auditors regarding the various points of the HST legislation and what changes should be expected. While the final HST legislation is still being worked out, an outline from the auditors regarding the upcoming changes suggests: “The OMHA and its member organizations [OMHA] are non-profit organizations [NPO] and public sector bodies for the purposes of the Excise Tax Act. As a result, as long as their programs are primarily [greater than 50%] geared towards children 14 years and under, they will be exempt from charging GST and HST on its program fees. Further, the OMHA must directly provide its member players with a program that consists of supervised instructional classes or activities involving athletics or other recreational activities. In reviewing Canada Revenue Agency`s interpretations, it appears that any supply of services made by public sector bodies or NPO`s as part of an overall program of athletic activities for children under 14 years will be exempt. As a result, where the registration fees, tournament fees, transfer fees, tours, protests and appeals all relate to and are ancillary to an athletic program aimed at children [i.e. are incurred to enable members to participate in the athletic program], they should fall within the exempt provisions.” In short, since actual registration fees do not currently have GST charged, then HST will also not apply to the registration. However, on costs that are already being charged GST and not PST, after July 1, 2010 they will be charged the additional 8% PST. Expenditures like ice rental will have 8% PST added to the cost. The cost of doing business for the association will increase but the HST will not apply to registration itself. See below for a couple of common questions regarding the HST.
Question #1
A: No. Minor Hockey is currently not subject to GST taxation and therefore will not be subject to HST taxation. While registration won’t see an increase in taxation other costs such as ice-time will increase.
Question #2
A: No. As the above article states, all ancillary fees related to an athletic program for children should fall within the exempt provisions. Click Here for an official document from the Government of Ontario concerning what tax changes will come about with the HST. If you have any further questions please contact the OMHA at omha@omha.net. © 2010 Ontario Minor Hockey Association. All rights reserved. |
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