ON – Ontario Issues General Transitional Rules for Harmonized Sales Tax

The Ontario Ministry of Revenue has issued the general transitional rules that will apply to transactions which straddle the implementation date of July 1, 2010 for the new harmonized sales tax. Overall, the HST would apply to goods and services purchased on or after July 1, 2010. In addition, consistent with the approach used in the Atlantic provinces and in Quebec, the HST would generally apply to prepayments starting on May 1, 2010, for goods or services that would be provided on or after July 1, 2010.

The transitional rules, which are available at http://www.news.ontario.ca/rev/en/2009/10/ontario-releases-hst-transitional-rules.html and at http://www.rev.gov.on.ca/en/notices/hst/03.html, outline which tax would apply in different areas for transactions that straddle July 1, 2010 — the current retail sales tax (RST) or the Ontario portion of the HST — and how the RST will be wound down.

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