RyersonUniversity
OntarioHarmonized Sales Tax(OHST)
Bulletin #3 – April 19, 2010
This bulletin examines the impact of the OHST on the sale of taxable goods & services to external parties by the University on or after July 1, 2010 as well as those sales taking place between May 1 and June 30, 2010(subject to OHST transitional rules).
The new OHST harmonizes the goods and services tax (GST) and the provincial sales tax (PST). Ryerson is registered for GST purposes and as a result is also registered for OHST purposes and is required to charge and collect OHST on all taxablegoods or services provided to external parties. As a general rule, the University is required to collect 13% OHST (comprised of a 5% federal portion and an 8% provincial portion)on all goods and services that are delivered on or after July 1, 2010. We must show the OHST on all invoices and receipts.
Units generating taxable sales should review their billing and cash register systems to ensure that appropriate modifications are made to allow for the charging and collection of OHST. As a general rule, the OHST tax base to be charged on the sale of goods and services is the same as the GST,with specified exceptions. For additional assistance see Frequently Asked Question (FAQ)at
Sale of Goods & Services by the University
The basic changes in tax application are:
1.While OHST comes into effect on July 1, 2010; depending on the situation, OHST can begin as early as May 1, 2010 under transition rules.
2.OHST transition rules determine the tax implications for invoices issued payments made that straddle the July 1, 2010 implementation date. i.e.
- after October 14, 2009, but before May 1, 2010, for goods and services delivered after July 1, 2010, and
- from May 1 to June 30 for goods/services delivered on or after July 1, 2010.
The implications of transition rules are illustrated in Table 1 below and will be discussed in Frequently Asked Question (FAQ) as well as in our upcomingtraining sessions.
3.Generally, everything that the university currently charges 5% GST for will be subject to OHST of 13%. Primary exceptionsare textbooks, prepared meals of less than $4 and items subject to point of sale rebates.Invoices and receipts which include goods eligible for a point of sale rebate on the provincial component of OHST should show both, the total OHST charged and the rebate for the provincial component of the OHST.
Point of sale rebates are extended to sale of books (including audio books), prepared food & beverages sold for $4.00 or less; children’s clothing, footwear, diapers, car seats & booster seats; print newspapers and feminine hygiene products. As indicated above these itemsare charged only the federal component (5%) of the OHST as they receive a point of sale rebate of the provincial component (8%) OHST.
4.The OHST is to be shown as a single tax on all invoices and cash receipt slips.
5.Certain provinces and their related agencies will be required to pay the OHST.They are P.E.I., Nunavut, Nova Scotia, New Brunswick, Newfoundland and Labrador and effective July 1, 2010 British Columbia and Ontario,
Tax application aspects staying the same are:
6.Services delivered by a “public institution” are generally nottaxable.
7.Exempt supplies continue to be “exempt” – e.g. salary recovery for employees working for other organizations,
8.Short term rentals - meeting roomsconference facilities continue to be taxed @ 13%,
9.Exempt courses are not taxable; Courses “not exempt” are taxable @ 13%,
10.A true grant is not taxable. However a grant that provides a deliverable or benefit available for the granting organization would be taxable.
OHST Exemptions(OHSTshould not be charged on the sale of goods or services):
- to certain provincial governments and their recognized agencies- Quebec, Manitoba, Saskatchewan, Alberta, NWT, Yukon.
- exported outside Canada,
- sales of goods or services for a nominal consideration. Nominal consideration means an amount equal to, or less than, the direct cost of the goods or services purchased less the OHST rebate i.e. a cost recovery sale with no profit or mark-up.
What Sales of Goods and Services Are Taxable for OHST?
Key transitional dates related to the assessment of OHST are:
- May 1, 2010 –begin assessment of OHST for goods and services transactions invoiced after May 1st, but not delivered or paid until after July 1st 2010.
- July 1, 2010 - cut over to OHST for all goods and services.
- October 31, 2010 - cessation of Ontario Retail Sales Tax (with some exceptions) – returns on which PST or ORST was charged.
Table 1: OHST Transition Summary for Sales of Taxable Goods & Services
Assuming Good or Service is Taxable / Old Environment / New EnvironmentPST / GST / HST
Sales before May 1, 2010
Does not matter when good/service is delivered / 8% / 5% / n/a
Sales between May 1 - June 30, 2010
Delivery of good or service before July 1, 2010 / 8% / 5% / n/a
Delivery of service on or after July 1, 2010
Service - where 90% performed before July 1, 2010 / 8% / 5% / n/a
Service - where more than 10% of service was performed on, or after, July 1, 2010 ( prorate) / 8% / 5% / 13%
Sales of good on, or after, July 1, 2010 / n/a / n/a / 13%
To determine if a good or service provided to external parties is taxable,
Consult our OHST Tax Table for Sales to External Partiesavailable on Financial Services OHST web page -
Some examples oftaxable goods & services that we provide are – supplies, rentals, short term accommodation, conferences, event admission and workshops. Examples of non-taxable goods & services that we sell and/or provide are application fees, degree courses, transcripts, research contracts & certain services (e.g. child care, consulting, etc.)
Guidelines for Sales to 3rdParties Located in other Canadian Provinces
Sale of Goods
Category 1: Sales to Harmonized Provinces:Harmonized provinces that participate in HST are Nova Scotia, Newfoundland and Labrador, New Brunswick and effective July 1, 2010 Ontario and British Columbia. OHST must be collected on external sales for any taxable goods that is sold and delivered to any of the harmonized provinces. The OST rate in effect for the harmonized provinces is 13% except for British Columbiawhere the rate will be 12%.
Category 2: Sales to Non- Harmonized Provinces:Only GST applies to sales to 3rd parties for taxable goods sold and delivered to any of the non-harmonized provinces - Quebec, PEI, Manitoba, Alberta Saskatchewan, and the Territories.OHST does NOT apply.
Sale of Services
There are special rules which apply to the sale of services (i.e. conferences, etc.) that are provided in Canada but outside the Province of Ontario, please contact Financial Services for details. These rules have not been finalized as yet by the taxing authorities.
Steps to follow to ensurethat the Correct Taxes are charged
To ensure that Ryerson units charge and collect the correct tax, please follow these steps:
1.Look up the good/service in the Tax Table and determine which taxes apply to the sale -
2.Determine when delivery/service takes place and which taxes applySee Table 1 above
3.Report tax collected as appropriate in your circumstances
For additional assistance on classifying your sales, contact and we will review information provided
Sales Invoices
Departments currently generating taxable sales and using 3rd party software systems or e-commerce sites should review their systems and business processes and consult their application service providers to ensure that appropriate modifications are made to the billing systems for the new OHST and that your system is capable of handling the changes. Please copy on the correspondence.
Ontario’s Ministry of Revenue recently released Tax Tip: Preparing for Ontario’s HST: #2 Invoicingwhich explains that the HST amount shown on an invoice should follow the existing GST/HST rules.
There is no need to show the federal and provincial components of OHST separately on invoices or receipts as the Canada Revenue Agency (CRA) has confirmed that OHST should be shown as a single line item. Invoices must show the total amount of OHST charged OR indicate that the amount paid for each taxable item includes the OHST.
The minimum Requirements for Sales Invoicesare as illustrated in the table below:
Total Sale# / Requirement Description / Less than $30 / $30 but < $150 / $150 or more
1 / Business name - RyersonUniversity / X / X / X
2 / Invoice date. If no invoice, the date on which the OHST is paid/payable / X / X / X
3 / Total amount (paid or payable) / X / X / X
4 / Total amount of OHST charged, or an indication that the amount for each taxable supply (other than zero-rated supplies) includes OHST / X / X
5 / If you supply items taxable at the GST rate and the OHST rate, indicate which items is GST taxed and which is OHST taxed. / X / X
6 / Ryerson Business Number / X / X
7 / Buyer’ name, trading name or name of authorized agent/representative / X
8 / Brief description of the goods or services / X
9 / Terms of payment / X
The sale of subscription services and/or advertising in printed materials and journals has very specific rules that apply to our business. Please email with a subject line of:Subscriptions and Printed Materials,
In the Coming Weeks
We will release additional information as it becomes available from the Canada Revenue Agency (CRA) and/or the Ontario Ministry of Finance.For clarification on any of the information included in this bulletin, please contact either our HSThelp @gwemail.ryerson.ca or the following persons - Ms. Shamniz Jetha, Senior Accountant, Financial Services at Ext. 6999, or Tim Chiu, Manager of Accounting & Treasury at Ext. 5019
Training and Education
In addition to many of the references in this bulletin, our training session on sales to external parties will contain specific data on - Room Tax, Alcohol Tax, Conference billing, Supply sales, Vending machines, Admission, Leases. All members of the university community with any billing responsibilities are strongly encouraged to attend Financial Services upcoming OHST education and information sessions. These sessions will provide a broad overview of the OHST and transition rules will be further explained. Attendance is essential to understanding the OHST, particularly if a unit is engaged in taxable sales of services or products. All are encouraged to attend. If you have any questions on the new OHST, they can be submitted to our OHST Help email capability . If we cannot answer your question immediately, we will ensure that the question is responded to.
Peter Gee, Financial Services
On behalf of the HST Coordinating Committee