HST
Back to GlossaryDefinition
A consumption tax paid by local consumers and businesses. It combines the Canada's federal goods and services tax and various provincial sales taxes.
Summary
HST (Harmonized Sales Tax) is a combined federal and provincial sales tax used in certain Canadian provinces. It merges the federal GST (Goods and Services Tax) with provincial sales tax into a single, streamlined tax collected at the point of sale. Currently used in provinces like Ontario, Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island, HST simplifies tax collection and administration for both businesses and consumers.
Usage Context
Understanding HST is crucial when studying Canadian taxation systems, business accounting, consumer economics, and provincial fiscal policies. Essential for calculating true costs of goods and services in HST provinces.
Common Confusions
- Thinking HST applies in all Canadian provinces
- Confusing HST rates between different provinces
- Not understanding that HST replaces both GST and PST
- Mixing up which businesses can claim input tax credits
