New Brunswick Sales Tax: What You Need To Know

The sales tax in New Brunswick, Canada, is known as the Harmonized Sales Tax (HST). It 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 HST rate of 15%goods and services across the province. The HST came into effect in New Brunswick on April 1, 1997, after the signing of the Comprehensive Integrated Tax Coordination Agreement (CITCA) between the Government of New Brunswick and the Government of Canada. The HST is administered by the Canada Revenue Agency (CRA) and is in place in several other provinces, including Ontario, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island.

The Harmonized Sales Tax (HST)

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

The HST is administered by the federal government through the Canada Revenue Agency (CRA), which means that businesses or individuals registered as HST collectors (registrants) only have to deal with one government agency for tax collection, remittance, and reporting. Other provinces that participate in the HST include Newfoundland and Labrador, Ontario, Prince Edward Island, and Nova Scotia.

The HST is applied 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, while printed books, audio recordings, and scriptures are taxed at the federal rate of 5% with an instant rebate for the provincial component. 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.

The HST rate has not always been 15%. On July 1, 2016, the rate increased from 13% to 15%.

Provincial Sales Tax (PST)

New Brunswick has a Provincial Sales Tax (PST) of 10%, which forms part of the province's Harmonized Sales Tax (HST). The HST was introduced in New Brunswick on 1 April 1997, when the province harmonised its PST with the federal Goods and Services Tax (GST) to create a single HST. The HST is a value-added tax, and the current rate is 15%, comprising the federal GST of 5% and the provincial PST of 10%.

The HST is applied to the same base of goods and services as the federal GST and is imposed on all goods and services taxable under the federal Excise Tax Act. This includes most goods and services, although there are some categories that are exempt or rebated from the HST. For example, basic groceries (including meats, fish, cereals, dairy products, eggs, vegetables, coffee, and tea), prescription drugs, and feminine hygiene products are zero-rated from the federal portion of the HST and are therefore exempt.

The HST is administered by the federal government through the Canada Revenue Agency (CRA), which means that registrants (businesses or individuals registered to collect the HST on taxable sales) only need to collect one sales tax and remit and report to one government agency. The HST rate in New Brunswick is the same as that in Newfoundland and Labrador, Nova Scotia, and Prince Edward Island.

Goods and Services Tax (GST)

The Goods and Services Tax (GST) is a federal sales tax applied across Canada. The GST rate is currently 5% in most provinces, including Alberta, British Columbia, Manitoba, Northwest Territories, Nunavut, Quebec, Saskatchewan, and Yukon.

On October 18, 1996, the Government of New Brunswick and the Government of Canada signed the Comprehensive Integrated Tax Coordination Agreement (CITCA), which led to the implementation of the Harmonized Sales Tax (HST). The HST in New Brunswick combines the federal GST (5%) and a provincial sales tax (10%), resulting in a total sales tax rate of 15%. This change came into effect on April 1, 1997, and New Brunswick joined other participating provinces such as Newfoundland and Labrador, Ontario, Prince Edward Island, and Nova Scotia in adopting the HST.

The HST applies to most goods and services in New Brunswick, but there are some exemptions and rebates available. For example, basic groceries, prescription drugs, and feminine hygiene products are zero-rated, meaning they are taxable at a rate of 0% GST/HST. Additionally, certain goods and services are directly exempt from the federal portion of the HST, including residential resales of previously owned property, long-term rental accommodations, educational services leading to qualifications, and medical and dental services. Registered First Nations individuals are also granted rebates on both the provincial and federal portions of the HST for products and services bought and used on reserves.

The HST is administered by the federal government through the Canada Revenue Agency (CRA), which collects the tax, processes applications, and provides rulings and interpretations on HST policy. The CRA is the main point of contact for individuals and businesses with queries or administrative issues related to the HST.

New Brunswick's tax rate

New Brunswick's sales tax rate is 15% in total, a combination of the federal Goods and Services Tax (GST) of 5% and a provincial component of 10%. This is known as the Harmonized Sales Tax (HST) and came into effect on April 1, 1997, after the Government of New Brunswick and the Government of Canada signed the Comprehensive Integrated Tax Coordination Agreement (CITCA) on October 18, 1996.

The HST is a value-added tax, which is composed of the federal GST and the provincial tax. It is applied to the same base of goods and services as the federal GST. The HST is administered by the federal government through the Canada Revenue Agency (CRA). This means that registrants (businesses or individuals registered to collect the HST on taxable sales) only have to deal with one government agency for collection and reporting.

Other provinces that have implemented the HST include Newfoundland and Labrador, Ontario, Nova Scotia, and Prince Edward Island.

The Comprehensive Integrated Tax Coordination Agreement (CITCA)

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), 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% and a provincial tax of 10%, resulting in a total tax rate of 15%. This means that the HST is applied to the same base of goods and services as the federal GST. The HST is administered by the federal government through the Canada Revenue Agency (CRA), which registrants, including businesses and individuals, must pay.

The CITCA and the introduction of the HST in New Brunswick were part of a broader initiative for tax harmonization. Other participating provinces in this initiative include Newfoundland and Labrador, Ontario, Prince Edward Island, and Nova Scotia. The Canada Revenue Agency (CRA) is responsible for administering the HST on behalf of all these participating provinces.

The CITCA has had a significant impact on taxation in New Brunswick, streamlining the tax system by combining the federal GST and provincial sales tax into a single HST. This change has simplified the tax structure and improved efficiency in tax collection and administration.

Additionally, the CITCA has provided flexibility for tax policy in the province. For instance, it allows for adjustments to the HST rate, designating point-of-sale rebates, and setting rebate rates and thresholds for specific sectors or organizations. These provisions enable the government to make tax policy decisions that align with economic goals and address the needs of the province.

Frequently asked questions