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Return to the PST

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Re: Return to the PST

Postby jennylives » Jan 2nd, 2013, 9:34 pm

Well that doesn't apply to us but thanks.

We hardly paid PST on anything as we were not the end user but with HST we are charging 12% on labour with no input credit. That sucks. Most of our products were also PST exempt so it was just GST being charged out. For us, it will be a benefit.
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Re: Return to the PST

Postby Gone_Fishin » Jan 2nd, 2013, 9:38 pm

jennylives wrote:Well that doesn't apply to us but thanks.



I guess you'll have to explain why you want to pay 7% more for your operating costs and reduce your profitability correspondingly. Last time I checked, reducing one's profits by paying more taxes wasn't the best way to go for a business.
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Re: Return to the PST

Postby Veovis » Jan 2nd, 2013, 9:41 pm

Logitack wrote:what is even more laughable is all these business whining and moaning that they arent ready or in fact do not even know there is going to be a change from the hst to the pst


I would agree with your distaste for this whining. Yes it is annoying, but not being ready? They've had a year to prepare and I think that was fine amount of time to prepare. The Libs were idiots in how they brought it in and the people were idiots on how it went out, but you can't say there wasn't time....


Fisher - the changes won't hit every single business exactly the same due to matters of scale, size, and the location of the major customer, perhaps in this instance the changes are immaterial in the grand scheme for accounting purposes. Your argument in general isn't wrong, but this is a specific instance, not the market overall.
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Re: Return to the PST

Postby jennylives » Jan 2nd, 2013, 9:42 pm

Because we didn't. They give you a PST # and if you use it you don't pay it. We've compared the two systems and the numbers show we pay more under HST. Our costs are not going up (due to PST).
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Re: Return to the PST

Postby Gone_Fishin » Jan 2nd, 2013, 9:44 pm

jennylives wrote:Well that doesn't apply to us but thanks.

We hardly paid PST on anything as we were not the end user but with HST we are charging 12% on labour with no input credit. That sucks. Most of our products were also PST exempt so it was just GST being charged out. For us, it will be a benefit.



What? How is your charging HST on labour costing you anything? Customer pays you the HST, you give it to the government. Costs you nothing.

Everything you purchase has input tax credits, save a couple of small transitional items like puny portions of utilities on overheads.

Are you sure you did the HST returns correctly? :137:
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Re: Return to the PST

Postby Gone_Fishin » Jan 2nd, 2013, 9:53 pm

jennylives wrote:Because we didn't. They give you a PST # and if you use it you don't pay it. We've compared the two systems and the numbers show we pay more under HST. Our costs are not going up (due to PST).


You're going to pay 7% more on office supplies. You're going to pay 7% more on vehicles and vehicle repairs. You're going to pay 7% more on computers and computer repairs. You're going to pay 7% more for janitorial supplies. You're going to pay 7% more for promotional items. You're going to pay 7% more for legal fees. You're going to pay 7% more for internet access. You're going to pay 7% more for long distance phone. You're going to pay 7% more for equipment rentals.

And the list goes on. NONE of those items can be purchased PST exempt with a PST number.

You need a real accountant to do your cost analysis for you.
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Re: Return to the PST

Postby jennylives » Jan 2nd, 2013, 9:57 pm

I was saying it sucks, not that is costs more. It's costing our customers 7% more. Under PST we rarely remitted anything and we did not pay much either. Just for office supplies and sundries pretty much. Are companies not taking advantage of their exemptions?
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Re: Return to the PST

Postby jennylives » Jan 2nd, 2013, 10:00 pm

How many vehicles and computers are small business buying? 1 of each in 6 years for us. Our office staff is the janitorial service. Promotional items? :dyinglaughing:
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Re: Return to the PST

Postby Gone_Fishin » Jan 2nd, 2013, 10:01 pm

jennylives wrote:I was saying it sucks, not that is costs more. It's costing our customers 7% more. Under PST we rarely remitted anything and we did not pay much either. Just for office supplies and sundries pretty much. Are companies not taking advantage of their exemptions?



The only exemptions are allowed on items for resale, bundled into the final product. Shop supplies will cost you 7% more now, too. There was a temporary exemption on direct manufacturing equipment that may not be reinstated with the new PST.

It WILL cost you more to operate your business under the PST. Period.
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Re: Return to the PST

Postby jennylives » Jan 2nd, 2013, 10:04 pm

Not in my experience. We don't even pay 7% on rags when we buy them from our suppliers.
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Re: Return to the PST

Postby Gone_Fishin » Jan 2nd, 2013, 10:07 pm

jennylives wrote:Not in my experience. We don't even pay 7% on rags when we buy them from our suppliers.


That's illegal and tax fraud. Like I said, you need a real accountant to advise your boss on this.
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Re: Return to the PST

Postby Sn0man » Jan 2nd, 2013, 10:12 pm

jennylives wrote:It's costing our customers 7% more.


That was my issue with it as well.

People already weren't spending money. Then I had to charge 7% more. They didn't like that, and business slowed to a crawl.

I didn't like that.
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Re: Return to the PST

Postby jennylives » Jan 2nd, 2013, 10:13 pm

Lol, we didn't have anything to do it with it. Our (multiple) suppliers issue the invoices and assign the taxes accordingly. They are used in the creation of a real product and not just for dusting though. Please continue on informing me how we will be paying more... :127:
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Re: Return to the PST

Postby Gone_Fishin » Jan 2nd, 2013, 10:33 pm

jennylives wrote:Lol, we didn't have anything to do it with it. Our (multiple) suppliers issue the invoices and assign the taxes accordingly. They are used in the creation of a real product and not just for dusting though. Please continue on informing me how we will be paying more... :127:



It's your responsibility as a PST registrant to self-assess any taxes that were not charged correctly by your supplier. Failure to do so is illegal.

Shop supplies like rags, cleaners, and lubricants are not PST exempt even if they are used in the process to create the final product. Shop supplies WILL cost your business 7% more under the PST than under the HST.
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Re: Return to the PST

Postby Rwede » Jan 3rd, 2013, 8:39 am

Uhh, Jenny, Fisher is right. You've got a mess on your hands by not self-assessing PST on production supplies and other non-exempt items you purchased where the supplier didn't charge PST because you gave them an exemption certificate in error.

And, you have a duty to inform your employer of the potential liabilities you face (tax, penalties, interest, or worse) when (not if) the tax auditors come knocking. This kind of tax non-compliance is often a huge financial shock to companies, and has been the cause of some to fold up shop and declare bankruptcy when the tax penalties are assessed by the auditors.

A fellow I knew back in the mid-2000s was presented with a $108,000 bill when the PST auditors were done with him, and this was a small business with about 7 or 8 employees. Penalties and interest add up fast.

It's really serious stuff, and it's another reason that the PST with all its crazy exempt/non-exempt rules is a stupid alternative to the straightforward HST. Even experienced bookkeepers have no idea how it works, as evidenced by Jenny's complete lack of understanding in her business.
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