Hst In New Brunswick: What's Taxable?

The Canadian province of New Brunswick charges a Harmonized Sales Tax (HST) of 15%, which is made up of a 10% provincial sales tax and a 5% federal sales tax. The HST has been in place since 1997, when it replaced the GST and PST, and is applied to most goods and services, with some exemptions and rebates. These include basic groceries, prescription drugs, feminine hygiene products, and certain types of property and vehicle purchases. The HST rate was increased from 13% to 15% on July 1, 2016, and it is administered by the Canada Revenue Agency (CRA) on behalf of the federal government.

History of HST in New Brunswick

On October 18, 1996, the Government of New Brunswick and the Government of Canada signed the Comprehensive Integrated Tax Coordination Agreement (CITCA). This agreement led to the implementation of the Harmonized Sales Tax (HST) in New Brunswick, which came into effect on April 1, 1997. The HST is a value-added tax that combines the federal Goods and Services Tax (GST) of 5% with a provincial tax rate of 10%, resulting in a total tax rate of 15% on most goods and services.

Prior to the introduction of the HST in New Brunswick, the province charged separate GST and Provincial Sales Tax (PST) rates. The HST was adopted to simplify the tax system and bring it in line with other participating provinces, including Newfoundland and Labrador, Ontario, Prince Edward Island, and Nova Scotia.

On July 1, 2010, New Brunswick increased the provincial portion of the HST from 8% to 10%, resulting in a total HST rate of 15%. This change was made to align the provincial tax rate with the federal GST rate. The increase in the HST rate impacted the pricing of most goods and services in the province.

In 2016, the HST rate in New Brunswick was increased again, this time from 13% to 15%. This change took effect on July 1, 2016, and was implemented by the Canada Revenue Agency (CRA). The CRA is responsible for administering the HST and handling any issues related to its application. Transitional rules were put in place to determine which tax rate would apply to certain transactions that occurred around the time of the increase.

The HST applies to most goods and services in New Brunswick, but there are some exemptions and rebates. For example, basic groceries, prescription drugs, and feminine hygiene products are exempt from the federal portion of the HST. Additionally, registered First Nations individuals are granted rebates on both the provincial and federal portions of the HST for products and services bought and used on reserves.

HST rate and components

The Harmonized Sales Tax (HST) in New Brunswick is a value-added tax that came into effect on 1 April 1997. The HST rate is 15% and is composed of a federal component of 5% (GST) and a provincial component of 10%. The HST is applied to most goods and services, although some categories are exempt or rebated.

The HST was adopted in New Brunswick on 1 July 2010, increasing the tax rate from 13% to 15%. This change saw the provincial portion of the HST increase by 2%, from 8% to 10%. The HST is administered by the federal government through the Canada Revenue Agency (CRA), which collects HST, processes applications, and makes rulings and interpretations on the application of HST policy.

There are two types of exemptions for HST: direct exemptions and zero-rated goods and services. While the difference relates to how businesses handle costs, as a consumer, you would not pay HST on items from either category. Zero-rated goods and services from the federal portion of the HST include basic groceries (such as meats, fish, cereals, and vegetables), prescription drugs, and feminine hygiene products. Direct exemptions from the federal portion of the HST include residential resales of previously owned property, rental accommodations longer than a month, educational services leading to a certificate or required for a certain practice, medical and dental services, and financial services.

HST exemptions and rebates

The Harmonized Sales Tax (HST) in New Brunswick is a combination of the federal Goods and Services Tax (GST) and the provincial sales tax. The HST rate is currently 15%, with the GST at 5% and the provincial sales tax at 10%. The HST has been in effect in New Brunswick since April 1, 1997, and it applies to most goods and services. However, there are several exemptions and rebates available.

HST Exemptions

There are two types of exemptions: direct exemptions and zero-rated goods and services. While the specifics of how businesses handle the costs of these exemptions differ, as a consumer, you would not have to pay HST on items from either category.

Zero-Rated Goods and Services

• Basic groceries, including meats, fish, cereals, dairy products, eggs, vegetables, coffee, and tea.
• Prescription drugs, excluding over-the-counter medications.
• Feminine hygiene products.

Direct Exemptions

• Residential resales of previously owned and used property.
• Rental accommodations for longer than a month.
• Educational services leading to a certificate, diploma, or specific practice requirements.
• Medical and dental services.
• Financial services, such as bank fees.

HST Rebates

The Government of Canada offers rebates for Registered First Nations individuals on both the provincial and federal portions of the HST for products and services bought and used on reserves.

Additionally, the Province of New Brunswick provides rebates for the following:

• Printed books, audio recordings, and scriptures: While these items are taxed at the federal rate of 5%, there is an instant point-of-sale rebate for the 10% provincial component.
• Research and Development: The province offers a refund of the 10% provincial component of the HST on supplies and services used directly in research and development by a university.
• Specially Equipped Vehicles: The province will refund the 10% provincial component of the HST for vehicles purchased in the province that are specially equipped with wheelchair or scooter access devices or auxiliary driving controls, provided they are not used for earning profit and the claimant is not eligible for other GST/HST credits related to the purchase.

HST on vehicles

In New Brunswick, a 15% tax is applied to all vehicles. This tax may be either the federal Harmonized Sales Tax (HST) or the Provincial Vehicle Tax (PVT), depending on how the vehicle is acquired.

The HST is made up of a 5% federal sales tax and a 10% provincial sales tax. It is applied to most goods and services, including vehicles, although some categories are exempt or rebated from the tax. The HST has been in effect in New Brunswick since July 1, 2010, with a rate increase from 13% to 15% on July 1, 2016.

The PVT, on the other hand, is applied at a rate of 15% to all vehicles purchased privately in New Brunswick or vehicles purchased privately elsewhere in Canada and brought into New Brunswick for use. The PVT is administered by the Revenue Administration Division of Finance and Treasury Board.

For individuals purchasing a vehicle in New Brunswick, it is important to understand the difference between the HST and the PVT to determine which tax will be applicable to their purchase. The HST is typically applied to vehicles purchased from a registered dealer, while the PVT is applied to private vehicle purchases.

In addition, there are specific cases where refunds or exemptions from the HST on vehicles may apply. For example, the province of New Brunswick offers a refund of the 10% provincial component of the HST for specially equipped vehicles that are modified to accommodate individuals with permanent disabilities. This includes vehicles with devices to enable wheelchair or scooter access or those with auxiliary driving controls.

HST administration

The administration of the Harmonized Sales Tax (HST) in New Brunswick is handled by the federal government through the Canada Revenue Agency (CRA). This agency is responsible for collecting HST, processing applications, and interpreting and ruling on the application of HST policy. The CRA is the sole government agency that registrants (businesses or individuals authorised to collect HST on taxable sales) deal with for administrative issues.

The HST in New Brunswick is a combination of the federal Goods and Services Tax (GST) and the provincial sales tax. The current rate is 15%, with the GST contributing 5% and the provincial portion contributing 10%. This rate was increased from 13% to 15% on July 1, 2016.

The HST was first implemented in New Brunswick on April 1, 1997, following the signing of the Comprehensive Integrated Tax Coordination Agreement (CITCA) between the Government of New Brunswick and the Government of Canada on October 18, 1996. This agreement led to the harmonisation of the provincial sales tax with the federal GST, creating the HST.

There are exemptions and rebates available for certain goods and services under the HST. For example, basic groceries, prescription drugs, and feminine hygiene products are zero-rated, meaning they are exempt from the federal portion of the HST. Additionally, there are direct exemptions for certain categories, such as residential resale property, long-term rental accommodations, and educational services.

New Brunswick also offers refunds for the provincial component of the HST in specific cases. For instance, refunds are available for purchases of printed books, audio recordings, and scriptures, as well as for research and development expenses incurred by universities. Refunds for the provincial portion of the HST are also provided for specially equipped vehicles that meet certain criteria, such as those with wheelchair or scooter access.

Frequently asked questions