Kitchen & Bath Magazine

Early in December 2009, the Ontario Ministry of Revenue began conducting seminars to inform various business sectors of the implications of the HST and how it will apply to their particular business.  On December 9th, the Ontario Architect’s Association hosted one of these seminars for their members, and those of ARIDO and OSPE where representatives of the Ministry presented and answered a barrage of questions fired at them by approximately 100 agitated professionals in attendance.

The short version is that on everything the GST is currently applied, the HST will be applicable as of July 1, 2010.  That includes design fees, retainers, contractor labour and all tangible product. 

But there’s a catch:  a designer, dealer or renovator who sells to a consumer goods which will be permanently installed, such as kitchen cabinetry, which won’t be delivered until July 1st or after, must charge the HST as of May 1st unless the product is paid for in full before May 1st .

Currently, for cabinetry manufactured in Ontario, 8% PST is calculated on the wholesale cost and is included in the manufacturer’s price to a dealer who then marks up the product and sells it to the end user adding 5% GST.  Under the new law, the HST is tantamount to charging the 8% on the selling price of the cabinets as of May 1st if the product won’t be delivered and installed until July.  If the client pre-pays the entire amount prior to May 1st, only the current 5% GST will apply.

If kitchen dealers are looking for a way to stimulate sales this winter, this could be the catalyst that inspires a client to move forward with their dream project sooner than they might have otherwise.

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