Is the tax break really applied?

Although many Canadian businesses are attempting to comply with the goods and services tax and harmonized sales tax holiday, some are reporting persistent inconsistencies that make it difficult to apply the exemption.

Sam Carethe store owner Playful Minds in Toronto, says it has done everything in its power to properly identify the products affected by the exemption.

Toy stores often sell a variety of items, she said, and some remain taxable, despite the exemption.

According to Ms. Carestores like his each have their own interpretation of the measurement, which can cause problems at the checkout.

If customers complain to the checkout because a product is taxed here and not elsewhere, I simply remove the taxsays Mrs. Care.

She also consults the websites of other toy stores which sell all their products tax-free even though, according to her, some are still taxable. She then feels obliged to follow the trend.

For me, he’s my competitor. So if their products are tax exempt, it’s difficult for customers to buy the same product from us if they don’t get the same exemption. This is absolutely unfair.

Mike Heddlestore owner Bounty Hunter Toys in Hamilton, was certain that impeccable implementation of the exemption was mandatory for all retailers.

He now realizes that he could have simply forced customers to file refund requests if a tax was incorrectly imposed.

It’s not entirely obligatory he said. We can tell customers that implementing the tax break is too complicated and encourage them to get a refund afterwards.

Even if Mr. Heddle had understood these details beforehand, he believes that he would still have removed the harmonized sales tax on all products affected by the exemption to avoid losing customers.

No one wants to take the extra steps to get their taxes refunded. It’s often a headache.

L’ARC can do checks

The temporary tax break came into effect last Saturday. This is a measure adopted by the federal government to reduce the expenses of Canadians for two months.

A wide range of products are targeted, including some sold in grocery stores, bookstores and restaurants.

Ottawa also suspended the TPS on children’s clothing, shoes and toys, among others.

In an email sent to -, the Canada Revenue Agency points out that the exemption has received royal assent and encourages businesses to comply with it.

A spokesperson also indicates that only companies which deliberately refuse to respect the measures will be subject to verification.

The Agency will take a hands-on approach to compliance and our efforts will focus on situations where businesses deliberately and blatantly refuse to comply with temporary measures.

If a customer believes they have been billed for TPS/HST by mistake for items temporarily exempt from taxes, theARC encourages the customer to request a tax refund from the supplier or retailer.

Maximilien Roy, vice-president for Quebec and the federal government of Restaurants Canada, ensures that theARC was very clear in its explanation of the tax holiday.

They will recognize the good faith of restaurateurs if there is an error here and there in the application of the tax. These are things that happen says M. Roy.

That being said, he urges restaurateurs and retailers to put the exemption into effect, to avoid being investigated by theARC.

Businesses that don’t put measures in place because they don’t want to put themselves at risk of being investigated by CRA inspectors. They will want to validate whether there was a real effort for measures to be put in place.

He reminds that businesses now have access to a help line (New window) of theARC if they do not know which products are taxed.

A discount poorly put together

Jasmin Guénette, vice-president of national affairs for the Canadian Federation of Independent Business, believes the exemption was poorly designed.

This could explain, according to him, the confusion of certain companies regarding its application.

It’s so complicated to understand the list of products that are exempt and not exempt he maintains.

All in all, the exemption was introduced, according to him, too quickly and for the wrong reasons.

The bill, essentially, was introduced for political reasons much more than for economic reasons. It was poorly put together, and only causes confusion.

After five days of exemption, Lori Parkerco-owner of the store Treasure Island Toyshas already experienced moments delicate with some of its clients.

Still, she’s not worried about her store being investigated by theARC.

If we were to be investigated, I think we would be able to back up our reasoning and explain why we came to these conclusions says Ms. Parker.