Return HomeFrançaisNot a Member? JoinMember Home
AboutBenefitsChaptersEventsMediaClassifiedsContactSearch

OHST

Ontario Harmonizing Sales tax (OHST) – Updated July 1, 2010

CRA (written answers):Q & A on OHST

HST Powerpoint 

NGCOA Canada OHST Position Statement

NGCOA Canada Submission to
Standing Committee on Finance
OHST Assumptions

OHST and Insurance

OHST and not for profits

OHST Committee
NEW: OHST Exemptions for Junior Recreation Programs

OHST Marketing Tools

OHST point-of-sale exemptions

OHST poster: Golf fees

OHST poster: Membership and multi-game packages

OHST Transitional rules

OHST Web Resources

Other Issues to Consider
Preparing for the OHST - What You Need to Know Seminars and Webinars
Upcoming Key Dates

HST – Exemptions for Junior Recreation Programs
The Canada Revenue Agency (CRA) verbally confirmed on May 5th, that there is an HST Exemption available for Junior Recreation Programs for all registered non-profit organizations and federal/provincial/municipal organizations.

For a junior golf camp program to qualify, in addition to the facility’s classification as a non-profit facility or government owned facility, there must also be an educational component as well as a physical component incorporated into the day’s activities. This exemption is only valid for juniors 14 and under. For more information on this exemption, please click here to visit the CRA website or contact the CRA directly.

Preparing for the HST – What You Need to Know
The Harmonized Sales Tax (HST) will take effect in Ontario on July 1, 2010 replacing the existing provincial Retail Sales Tax (RST) and combining it with the federal Goods and Services Tax (GST).The move to HST means you will now only deal with one set of forms, one payment and one point of contact for audits, appeals and taxpayer services. Click here for a checklist you can use as a general guide of what you need to know as the July 1, 2010 implementation date approaches.


OHST Posters for your course:
Need to explain to your customers the hike in prices due to the introduction of the HST?  Let the NGCOA Canada help you with downloadable posters you can print and post at your course! Click here for the golf fees poster (effective July 1) and click here for the memberships and multi-game packages poster (effective May 1).  

Other Issues to Consider:
With the implementation of HST fast approaching there are a number of important issues to consider:
  •           Transitional issues – it will be important to examine the various transitional rules for transactions that straddle the July 1, 2010 implementation date. Click here to view the transitional rules.
  •           Place of supply - the new place of supply rules may mean that you will be required to charge the HST on certain goods and services delivered to or performed to customers outside of Ontario.  
  •           Pricing – examine the potential costs savings.  Where you currently pay non-refundable RST on such things as office equipment and supplies, this will become refundable under the HST for most businesses making taxable supplies.  The HST savings may help you to reduce your prices and make you more competitive. 
  •           Timing of purchases – stocking up on purchases of goods that currently do not attract RST but that will attract HST on July 1, 2010, will assist in reducing overall costs.  Conversely, consideration should be given to deferring certain purchases that are subject to the non-refundable 8% RST which will be fully recoverable under the HST after June 2010.
  •           Current contracts – discussing the impact of HST on your suppliers will assist you in determining whether your supplier’s costs will be positively affected by the implementation HST and as such allow you to purchase these products at a lower price.

Back to Top 
The Canada Revenue Agency is offering free seminars (registration required) throughout Ontario. Click on the following links for the one in your region or the date of the next online seminar. In addition, the links also provide information on Harmonized Sales Tax.
 

UPCOMING KEY DATES
May 1, 2010
June 30, 2010
  • All RST vendors will receive a final Retail Sales Tax (RST) return that ends on this date. Vendors whose normal reporting period ends after June 30, 2010 will be required to file a final RST return for the shortened period ending on this date. Final returns are due by July 23, 2010.
July 1, 2010
  • Implementation date of HST in Ontario. Suppliers of taxable goods and services in Ontario are generally required to charge, collect and remit HST.
  • RST will continue to apply to taxable insurance premiums and private sales of used vehicles.
October 31, 2010
  • All RST liabilities are to be reconciled no later than this date and any RST that is collected or becomes payable (for example, any tax still owing from customers) after June 2010 is to be reported on a supplemental return to be filed by the business owner on or before the 23rd day of the following month. Additional information about supplemental returns will be provided in the near future.
For More Information
  • Call Ontario's Budget hotline at 1 800 337-7222 and Teletypewriter (TTY) 1 800 263-7776 or visit ontario.ca/taxchange for general information on introduction of the HST in Ontario and wind down of the RST.
  • To obtain a written interpretation on a specific situation relating to the RST on insurance that is not addressed in this publication, please send your request in writing to:
    Ministry of Revenue
    Tax Advisory Services Branch
    Retail Sales Tax Section
    33 King Street West, 3rd Floor
    Oshawa ON  L1H 8H5
  • Canada Revenue Agency is your source for the latest information on how the transitional rules apply and how to get ready for the HST. Visit the CRA's "Are You HST Ready" website at cra.gc.ca/harmonization or call 1 800 959-5525
Tax on Insurance Premiums
Ontario Retail Sales Tax (RST) currently applies at a rate of 8 per cent to premiums for certain types of insurance, including group insurance, contributions paid into funded plans or on benefits paid out of unfunded plans as well as payments made into insurance schemes or compensation funds established under an Act of Canada or Ontario.
Ontario's Transition to the HST
In the 2009 Ontario Budget, the government announced a comprehensive tax package that includes moving to an HST at a rate of 13 per cent effective July 1, 2010. Generally, insurance premiums are currently exempt from the federal Goods and Services Tax (GST) as financial services and the treatment under HST will be the same as under GST.
Maintaining RST on Insurance Premiums
Ontario will continue its application of tax at a rate of 8 per cent on the same types of insurance premiums currently taxed under RST. Insurance that is currently exempt from RST, such as automobile insurance premiums, will continue to be exempt from RST after June 30, 2010. Certain costs and fees, such as administration fees for benefit plans, will be exempt from RST as they are taxed under HST.
Remittances of RST on Insurance Premiums after June 30, 2010
Effective June 30, 2010, all current RST vendor accounts will be closed and businesses primarily engaged in insurance activities will be automatically re-registered. Tax return filing frequencies that are currently in place for RST returns will be maintained after June 30, 2010.
Businesses that provide self-insured benefits to their employees must contact the Ministry of Revenue prior to June 30, 2010 regarding registration to collect and remit RST.
Compensation
Under RST, vendor compensation is payable for the 12 month period commencing April 1 of each year. Vendors collecting RST on insurance premiums will be eligible for the general RST vendor compensation from April 1, 2010 to June 30, 2010. In the 2010 Ontario Budget, the government proposed a special transition period from July 1, 2010 to March 31, 2011 to ensure the annual maximum vendor compensation of $1,500 is maintained for that transition year. Vendors that collect RST on insurance premiums may claim compensation as follows:
  • maximum of $375 for the period April 1 to June 30, 2010,
  • maximum of $1,125 for the period July 1, 2010 to March 31, 2011, and
  • maximum of $1,500 for each fiscal year thereafter.
This proposal is included in Bill 16 (the Creating the Foundation for Jobs and Growth Act, 2010), which was introduced in the Ontario Legislature on March 25, 2010.
Information on how RST applies to insurance premiums can be found on the Ministry of Revenue's website.
For More Information
  • Call Ontario's Budget hotline at 1 800 337-7222 and Teletypewriter (TTY) 1 800 263-7776 or visit ontario.ca/taxchange for general information on introduction of the HST in Ontario and wind down of the RST.
  • To obtain a written interpretation on a specific situation relating to the RST on insurance that is not addressed in this publication, please send your request in writing to:

    Ministry of Revenue
    Tax Advisory Services Branch
    Retail Sales Tax Section
    33 King Street West, 3rd Floor
    Oshawa ON  L1H 8H5
Canada Revenue Agency is your source for the latest information on how the transitional rules apply and how to get ready for the HST. Visit the CRA's "Are You HST Ready" website at cra.gc.ca/harmonization or call 1 800 959-5525
The OHST and Non-Profit Organizations.
Click here to view the presentation from Deloitte (PDF format).

The OHST Committee has now finally received WRITTEN CONFIRMATION from Canada Revenue Agency (CRA) – specifically the GST/HST Rulings section of the Services and Intangibles Unit which will be the department in charge of this tax as of July 1, 2010 – on defining the interpretation of Transitional Rules for the golf industry: specifically golf membership sales, multi-pack green fee sales, lifetime memberships, etc. Here are the written responses that the OHST Committee received on Friday, December 11th, 2010:

1. Green fees sold for use on the day of play until June 30, 2010 incur only the GST (5%) charge. From July 1, 2010 and going forward, you must charge HST (13%) on the total. CRA confirmed this in writing on Dec. 11th. In addition it was noted, “Golf green fees are consideration for supplies of property for GST/HST purposes, specifically, a right to use a golf course. As such, the transitional rules for leases and licenses of property would apply to the green fees.”

2. Multi-packs of golf green fees - please see the following CRA written response on Dec. 11th:
- For a multi-pack of golf green fees in respect of the 2010 golf season, where the consideration payable for the multi-pack becomes due, or is paid without having become due after October 14, 2009 and before May 2010, a Supplier would only charge the GST (5%).
- For a multi-pack of golf green fees in respect of the 2010 golf season, where the consideration payable for the multi-pack becomes due, or is paid without having become due, on or after May 1, 2010 and before July 2010, a Supplier would charge the HST (13%) to the extent that the consideration is attributable to that part of the 2010 golf season that occurs on or after July 1, 2010. For purposes of determining the portion of the consideration on which the HST would apply, we would generally take into account that portion of the 2010 golf season that remains as of the date the multi-pack is sold.
- For a multi-pack of golf green fees in respect of the 2010 golf season, where the consideration payable for the multi-pack becomes due or is paid without having become due on or after July 1, 2010, a Supplier would charge the HST (13%).
3. 2010 golf memberships / annual golf dues: CRA confirmed the following information is essentially correct in writing on Dec. 11th. In addition it was noted, “However, the application will depend on the date that either the consideration becomes due (for example, the date on the invoice or the date it is issued, whichever is earlier) or the date it is paid without having become due.”
- If the golf membership fees become due, or are paid without having become due, by April 30th, 2010, the Supplier will only need to charge GST (5%) on the amount charged.  
- If the golf membership fees become due, or are paid without having become due, from May 1st, 2010 to June 30th, 2010 inclusive, the Supplier would prorate the golf fees based on the membership period and charge HST (13%) for the portion of the membership that occurs on and after July 1, 2010.
- From July 1, 2010, the Supplier would charge HST (13%) on the amount charged.
4. Regarding the pro-rating mentioned above in Question # 3, would this be based on a 12 month calendar year OR is this based on the length of the golf season (typically 6 month – May to October)? - please see the following CRA written response on Dec. 11th:
- It depends on the actual golf membership supplied. If the Supplier indicates that the golf membership provides rights for the full calendar year (for example, the clubhouse is open to members year-round), then the Supplier would prorate the membership period on that basis. If the Supplier indicates that the golf membership only provide rights for certain months (for example, the membership is valid from May to October 2010), and there are no benefits associated with the membership outside of those months, then the Supplier would prorate the membership period on that basis.
- Where the membership period is for the golf season, but the exact length of the period is not known when the membership is sold, the Supplier could prorate the membership period based on a typical golf season at that Supplier’s golf course using historical information.
5. Initiation Fees (either equity membership or non-equity membership):
Verbal response from CRA on May 3, 2010 - A decision has now been made on initiation fees for non-equity membership facilities, however they have not made a decision yet on initiation fees for equity memberships. If the initiation fee to join a non-equity membership club is paid on or before June 30th, 2010, the facility is to only charge GST (5%). As of July 1st it will increase to 13% with the HST. This initiation fee actually falls under the Intellectual Personal Property category (not membership category). Written response is to be sent this week and as soon as it is received by the NGCOA Canada, the exact wording will be posted here.
6. Lifetime golf memberships - please see the following CRA written response on Dec. 11th:
- For any lifetime golf memberships sold after October 14, 2009 and before July 2010, where the consideration in full becomes due or is paid without having become due at that time, the Supplier would charge GST on 25% of the consideration and HST on 75% of the consideration.
- For a lifetime golf membership that is paid over a multi-year arrangement (e.g. $10,000 a year for the next 3 years), the Supplier would charge HST (13%) on any portion that becomes due or is paid without having become due after October 14, 2009 and before July 2010, that exceeds 25% of the total consideration. In the example provided, the total consideration for the lifetime membership is $30,000, and 25% of that amount is $7,500. If the first $10,000 becomes due or is paid without having become due after October 14, 2009 and before July 2010, the Supplier would charge GST (5%) on the $7,500 and HST (13%) on the remaining $2,500. The two remaining payments would be subject to HST (13%) as they would become due or be paid without having become due after July 1, 2010.
7. Specific lifetime golf memberships and initiation fees questions from one of our members:
Question
-Is a "lifetime membership" the same as an initiation fee or entrance fee? If so, based on what I'm reading, HST applies to initiation fees charged from this point on.
-Assuming that a "lifetime membership" and an initiation fee are the same, what would be the tax implications of the following scenario:
-A club has a $20,000 initiation fee.
-A member can elect to be billed the entire $20,000 at once or he can elect to be billed $24,000 ($6,000 per year billed over 4 years with implicit interest of $4,000).
-A member who joins in 2008 elects the installment route and pays his first two $6,000 installments in 2008 and 2009 (only GST is charged on these amounts since the HST doesn’t exist yet)
-In late 2009 or early 2010 (prior to the implementation of the HST), the club offers the member the opportunity to be charged the remaining $12,000 balance on the basis that HST will not apply (it would actually be slightly less than $12,000 because it would be discounted due to the prepayment).
-Does the HST apply? CRA has not yet made a ruling on this yet, they are still debating the distinction of initiation fees internally.
8. Membership Assessment (for private golf clubs) questions from one of our members:
Question
-A club undertakes a significant capital improvement in 2006 and 2007 and finances it with debt.
-In order to cover its loan payment, the club assesses its members $50 per month until the loan is paid off. This $50 charge is subject to GST.
-With the HST announcement, the monthly $50 charge would be subject to an additional 8%.
-Prior to the implementation of the HST, the club gives members the opportunity to pay the present value of their future $50 billings in a lump sum on the basis that HST will not apply.  The club will use the proceeds from those members who elect to do so, to pay down its debt.
-Does the HST apply?- please see the following CRA written response on Dec. 11th:
The membership assessment described in this scenario would likely be viewed as additional consideration for the supply of the membership. If the lump sum payment of the membership assessment becomes due, or is paid without having become due, by April 30, 2010, the Supplier generally would need only to charge GST (5%) on the amount. The Supplier would likely be required to prorate any lump sum payments that become due, or that are paid without having become due, from May 1, 2010 to June 30, 2010 inclusive, based on the original period and charge HST (13%) for the portion of the period that occurs on and after July 1, 2010.
9. Golf tournaments or any special events: - please see the following CRA written response on Dec. 11th:
The CRA confirms that for green fees for golf tournaments and special events that occur at a Supplier’s facility before July 1, 2010, the Supplier will only charge the GST (5%) on the green fees for the event regardless of when they become due or are paid.
For golf tournaments and special events that occur at a Supplier’s facility on or after July 1, 2010, the Supplier would charge the HST (13%) on any green fees for the event that become due, or are paid without having become due, on or after May 1, 2010.
10. Locker Rentals and Club Storage Fees - CRA confirmed the following information is essentially correct in writing on Dec. 11th. In addition it was noted, “Both the locker rentals and the club storage are viewed as supplies of real property by way of lease, licence or similar arrangement, and the transitional rules for leases and licences would apply.”
- If the locker rental fee or club storage fee for the 2010 golf season become due, or is paid without having become due, after October 14, 2009 and before May 2010, a Supplier will only need to charge GST (5%) on the fee.  
 - If the locker rental fee or club storage fee for the 2010 golf season due, or is paid without having become due, from May 1st, 2010 and before July 1st, 2010, a Supplier would prorate the fee based on the rental or storage period which would end on the last day of the 2010 golf season and charge HST (13%) for the portion of the period that occurs on and after July 1, 2010.
- If the locker rental fee or club storage fee for the 2010 golf season due, or is paid without having become due, on or after July 1st, 2010, a Supplier would prorate the fee based on the rental or storage period which would end on the last day of the 2010 golf season and charge HST (13%) for the portion of the period that occurs on and after July 1, 2010.
- If the rental period or storage period is shorter or longer than the 2010 golf season, please refer to the GST/HST Notice 244, Harmonized Sales Tax for Ontario – Questions and Answers on Housing Rebates and Transitional Rules for Housing and Other Real Property Situated in Ontario, which is available on the CRA website for more information on the transitional rules for leases and licences of non-residential real property.
11. Service charges - Currently some Clubs charge a service charge (typically 12-15% of total price of service, i.e. food & beverage) which is required to charge GST on the service charge. This may be charged on the day of play or charged on the monthly membership invoice (at the end of the month).  So should golf facilities continue to charge GST (5%) on this service charge for all transactions until June 30th, but then as of July 1st, the Club will now be required to charge OHST (13%) on this service charge? – CRA’s written response on Dec. 11th.
“The service charges are likely additional consideration for the supply made by the Supplier and as such, the transitional rules that apply to the supply would also apply to the service charge. For service charges related to food and beverages, the Suppliers would continue to charge GST on any supplies made before July 2010. For any supplies that are made on or after July 1, 2010, the Supplier would charge HST (13%) on the service charges that become due, or that are paid without having become due, on or after May 1, 2010.”

12. If you have any other specific examples or requests as to how the OHST Transitional Rules will impact your business, please send an email to Shawn Hunter (shunter@ngcoa.ca) and he will ask for clarification from the Canada Revenue Agency and for it to be include it in the written direction from the CRA for all members to use as a resource in making their business decisions. 

Back to Top

Click here for the HST presentation from the NGCOA Canada National Conference on Wednesday, Nov. 11th by Mark Worrall, KPMG LLP
Please note that this PowerPoint Presentation by Mark Worrall, KPMG LLP is focused on BC, but as he re-iterated throughout the presentation it is virtually identical for us in Ontario (except for the % difference, in that here in Ontario the HST will be 13%).

Click here for the NGCOA Canada’s Submission, “OHST Threatens to Negatively Impact the Golf Industry” presented to the Standing Committee on Finance and Economic Affairs reviewing OHST legislation (at Queen’s Park, Toronto on Monday, Dec. 7th). This was to be the only chance for Ontarians to have their say in a public forum on tax harmonization. The time allotted by the government chaired hearing was severly limited to several hours over a couple of days. The NGCOA Canada was one of a select few organizations from across the province given this opportunity to voice their concern on the proposal that amounts to a new tax on our industry.

Back to Top 

Announcement on Nov 12th: Point-of-Sale Exemptions for Ontario HST for pre-packaged goods under $4 being OHST exempt (similar to the current rules for GST):
www.news.ontario.ca/rev/en/2009/11/more-point-of-sale-exemptions-for-ontario-hst.html  

Back to Top

The Transitional Rules for the OHST were announced on Wed. Oct. 14th. The complete OHST Transitional Rules can be found at: www.rev.gov.on.ca/en/notices/hst/03.html. 

Back to Top

Click here for news articles on the HST and its affect on the golf industry.

Click here for the NGCOA Canada OHST Committee approved Position Statement on the OHST. 

Back to Top

The OHST Committee has also recently been in touch with the Sport & Recreation Harmonizing Tax Coalition, as well as the Ontario Tourism Industry Association of Ontario to discuss how the NGCOA Canada can work together with either of these groups on informing the public and the politicians on this new tax and how we believe it will negatively impact the golf industry.
Ontario HST Facts:
•         The Ontario Provincial Liberal Government and the Federal Conservative Government have proposed to combine the 8% Ontario sales tax and the 5% GST into a single 13% value-added sales tax that would be federally administered, starting July 1, 2010 and will remain at that rate until at least 2012, regardless of a possible federal or provincial election.
•         The federal government is giving Ontario $4.3 billion in transition funds, most of which will be passed along to the lower- and middle-income families in the form of rebate cheques.
•         In a recent meeting with Ontario’s Assistant Deputy Minister of Finance, it was made very clear that the government will not be offering any blanket exemptions to the HST for any industries, and lobbying efforts will be unsuccessful
Ontario HST Assumptions:
•         Until the Legislation / Transitional Rules for the Ontario HST are announced later this year, we do not know for sure - however we are under the impression - that this will have an immediate and significant impact on the Ontario golf industry as both Golf Green Fees and Golf Memberships will increase by 8% as of July 1, 2010
•         The HST Input Tax Credits that each of the Ontario golf facilities are expected to receive equates to approx 1%. However the government has indicated that significant savings to business will occur. For many industries, it appears that this will be the case, however not for the golf industry (as highlighted in the Deloitte & Touche presentation).
Important HST Web Resources:
•         Ontario Ministry of Revenue website (HST info for businesses)
•         Dalton McGuinty’s official website and HST message to Ontarians (including typical Q&A’s):
•    Specifically, Why are you adding a new tax on goods and services you didn’t tax before?
•          We’re merging two taxes into one. Right now, there’s no PST on some purchases — you just pay the 5% GST. To make the single sales tax work, the 13% single sales tax will generally be charged on everything that has GST. People will pay more for some items at the cash register. To make the transition as smooth as possible, 93% of Ontario taxpayers will benefit from a personal income tax cut. This change won’t be easy. Change never is. But it’s absolutely essential if we’re going to make Ontario more attractive to businesses.
•         Online petitions have been created are being heavily promoted by both Ontario opposition parties – the NDP and the Conservatives. Perhaps you may want to include these links on your website OR in your e-newsletter to help your members be more involved.
•         As well, a couple Ontario chapter members have also created a very effective online HST message (including utilizing the sample letters listed below)  which was recently highlighted on the Golf News Now website. We urge you to consider including onto your website for your members - http://www.innerkiphighlands.com/hst and http://www.canadiangolfclub.com/HSTpetition.aro
Do you advertise your Golf Green Fees with taxes included?
If so, now may be the time for you to re-consider that approach. Many of your Ontario chapter members have indicated that they will be changing their pricing in 2010 by now advertising the green fee + applicable taxes. This will help educate the consumer on the actual amount of tax that they now are paying on their round of golf, as well it will avoid the decision of having to either raise your prices or absorb this additional 8% as of July 1, 2010. Some members who have already begun this process have indicated that the reactions from the golfers have been positive and in some instances, golfers’ perception is that the round of golf is now actually cheaper!
This committee is also developing various marketing tools to help our chapter members educate the consumer about the enormous impact on our daily lives including the increased cost of golf as of July 2010. These include:
•         OHST Background Info

Back to Top

Click here for the “Green Fees for Government – Assessing the Impact of Ontario Harmonized Sales Tax to the Golf Industry” presented by Mike Matthews, Deloitte & Touche LLP in June 2009.

The OHST Committee consists of members from all three Ontario Chapters. If you have any questions or would like to discuss this issue in more detail, please do not hesitate to contact any of the following:
•       Shawn Hunter, Regional Director, EOO Chapter 613-821-2260, shunter@ngcoa.ca
•       Vince Kishimoto, Regional Director, CON Chapter 905-826-6790,  vincek@ngcoa.ca
•      Katherine Nelson-Riley, SWO Chapter 905-934-0841, knelson-riley@ngcoa.ca
•      Carol Ann Campbell, Archie’s Family Golf Centre, Cornwall (EOO chapter), 613-932-8255, info@archiesgolf.com
•        Rob Howell, Metcalfe Golf & Country Club, Metcalfe (EOO chapter), 613-821-2701, rhowell@metcalfegolf.com
•        Tom Fischer, Tangle Creek Golf Club, Barrie (CON chapter),  705-791-4653,  TomF@maxium.net
•         Randy Fielder, Bonaire Golf Club, Barrie (CON chapter), 705-835-3125, info@bonairegolf.com  
•       Barry Forth, Copetown Woods Golf Club, Copetown (SWO chapter), 905-627-9268 ext. 23,  bforth@copetownwoods.com
•      Al Peister, Innerkip Highlands Golf Club, Innkerkip (SWO chapter), 519-893-1350 ext. 223, al@mcleanpeister.com    

 Back to Top

NGCOA Canada Programs & Initiatives

      Golfmax Purchasing Program Information   Golf Research Centre Website   Take A Kid To The Course Week Website    

    

Partner Programs

     Mike Weir Miracle Golf Drive For Kids Website   

Home | About | Benefits | Chapters | Events | Media | Classifieds | Contact | Search | Member Home
© 1995 - 2010 National Golf Course Owners Association Canada. All Rights Reserved.
Privacy Policy