The GST/HST Break Everyone's Talking About—Is Your Business In?
December 17, 2024
I am sure you heard about that the Canadian government has announced a GST/HST vacation for the season, giving you a tax break on essential holiday items from December 14, 2024, to February 15, 2025. This means you'll save on groceries, children's clothing, toys, books, and even Christmas trees! 🎄
The GST/HST vacation specifically targets certain goods and does not broadly apply to all services or products. From the details provided, the temporary tax relief applies to specific categories such as food items, children's products, printed books, and Christmas trees. Therefore, it would generally not apply to service-oriented businesses, such as coaching services or photography, as these are not included in the list of eligible goods.
For online businesses selling physical products, the tax exemption would only apply to those products explicitly mentioned as eligible (e.g., certain children's toys or books). Thus, if the online business sells items from the eligible list, the GST/HST relief would apply to those specific items.
Service providers such as coaches or photographers typically don't fall under the categories listed for tax relief unless they are selling physical goods that qualify under the eligible product list. Business owners should review the exact list of eligible products and consult with a tax advisor to determine the specific applicability to their offerings.
Here is a list of 4 types of businesses and services where the GST/HST holiday would not apply, as they do not fall within the specified categories of eligible goods:
1. Service-Based Businesses:
Coaching services
Photography services
Consulting services
Legal and accounting services
Health and beauty services (e.g., salons, spas)
2. Digital Products and Services:
Online courses and subscriptions
Software as a Service (SaaS)
Streaming services
Digital media and e-books
3. Non-Eligible Retail Products:
Electronics (except video game consoles and related items
Clothing and accessories for adults
Furniture and home goods not specified in the eligible list
Sports and recreational equipment not specifically mentioned
4. Food and Beverage Services
Restaurants, coffee shops, and catering services (unless specific food items are eligible)
Alcoholic beverages (above 7% ABV)
These categories are not included in the temporary tax relief and would continue to charge GST/HST as usual. Businesses should verify the eligibility of their specific products or services against the detailed list provided by the government or consult with a tax professional for clarification.
To see a comprehensive list of categories not included in the temporary tax relief, which will continue to charge GST/HST as usual, visit the Canada Revenue Agency's website. Businesses should verify the eligibility of their specific products or services against the detailed list provided by the government or consult with a tax professional for clarification.
The content of this article is for general informational and educational purposes only and is not intended as legal advice. Please contact a legal professional for advice specific to your situation.
Authored By: Maryam Hennig, LL.B Lawyer based in Toronto and Richmond Hill, Onfor Start ups, Small Businesses, and Online Service Providers