OHST Background Information
OHST Background Information
Are your aware that Golf Green fees and Golf Memberships for your facility will be taxed an additional 8% as of July 1st 2010 with the New Ontario HST?
A couple key things for you to think about:
- How will it impact your business?
- Is it too late to stop it?
- How will you educate your customers about it?
- If it proceeds, will you absorb this additional tax or will you pass it on to the customer?
The three Ontario Chapters of the NGCOA Canada have combined to form an HST Committee to look at these key issues and help our members work through them.
How will it impact your business?
At this point, until the specifics of the legislation are announced by the government later this fall, we don’t know the exact implications of the HST to your business with respect to any cost savings you may incur. However from the research we have received from Deloitte & Touche LLP, it does not appear that the typical chapter member will receive very much cost savings with the implementation of the new HST, if any at all. The real concern however is the impact that this will have to your customer and your overall revenues. The actual cost of golf (including green fees, membership dues, etc.) will all increase 8% as of July 1st, 2010. For an industry that is traditionally already considered by the general public to be an expensive pursuit, in addition to the flat growth in revenue that most golf courses in the region have been experiencing over the past couple years and especially in these tough economic times, this could not be happening at a worse time for your business.
Is it too late to stop it? NO.
Until it becomes legislation on July 1st, 2010, there is still a chance to make Ontario residents aware of the new HST (and the negative impact it will have on them) and public outcry to their local politicians may halt its progress. Not only will Ontarians be paying 8% more for golf green fees and golf memberships, but many other services, including gas, internet services, haircuts, gym memberships, legal and accounting services, construction and renovations, real estate commissions, and others will be increasing as a result of the HST. It is expected that the average Ontario citizen will be annually paying approximately $2500-$3500 more in taxes.
If it can’t be stopped, will you absorb this additional tax or will you pass it on to the consumer?
The reality of the situation is that virtually no business in this current economy can just absorb an additional 8% off the bottom line so you will be forced to pass it on to the customer. If you currently advertise your daily green fees with taxes included, this may be a good time for you to change your philosophy and actually post your green fee rates PLUS tax so that you can easily show your guests how much more that they are now paying in taxes.