HST Kicks In Saturday: Are You Ready?
Open Jaw

Beginning July 1, British Columbia and Ontario are combining their respective provincial sales taxes with the federal Goods and Services Tax (GST). But for the travel industry, where customers often book months before they travel, the real impact begins May 1, when retailers will be responsible for collecting HST for clients travelling after July 1. Big questions remain: Is the industry ready? Are you?

An Open Jaw phone-around revealed responses as different as the people surveyed. For some, the HST launch is not exactly a no brainer, but they’ve researched or taken an ARTA course and they believe they have a fairly good understanding of all the parameters. For many other retailers the onset of the HST in BC and Ontario remains a complete mystery. That’s reflected in an OpenJaw.com poll where only 12% of respondents indicate they are “fully prepared to start charging HST.”

What the all retailers do have in common is that their back office system is not ready for HST. Most BOS suppliers are U.S.-based and struggling with details themselves. TRAMS, for example, had claimed to be ready and it turns out they weren’t quite there. The company now says it will be ready at the end of next week.

The danger within the industry confusion is that agents could make mistakes which may only show up a year later during audit time. With a 7-8% jump in the tax collected, the amount owing could add up to a pretty penny. ARTA puts it this way: “Improper collection may lead to unfunded liabilities and expose those who owe tax to penalties and other repercussions.”

Here are some observations from retailers contacted by Open Jaw:

• Trish McTavish of McTavish Travel took the ARTA webinar and says she and her staff are confident in their knowledge – but their back office system is not yet ready.

• Carol Campbell of Uniglobe East in Gravenhurst says she has done some research on her own, but remains unclear on many details, particularly the percentage that needs to be charged during May and June, depending on how much of the vacation actually takes place in July. Mostly she says the timing is unfortunate — she is still busy bringing the last of her ash-stranded clients home after working dawn to dusk for the past 10 days.

• Glenn Barbour of Glenn Travel International in New Westminster B.C. is a resourceful type who took the time to research everything he could find on the web and says it isn’t rocket science for him. The only area of confusion is how claiming the HST works versus charging it. “It’s like everything else; I find a way to figure it out. You have to in this business.”

• A few consortia members said they are still waiting for direction from head office.

• Industry consultant Stuart Morcombe, who attended Baxter Travel Group’s recent Law Day, says he felt that government officials were contradicting each other during a panel on HST. He also says that even some suppliers seemed completely unprepared.

Let Open Jaw know where you’re at. Do you feel ready for HST? Has the government provided enough information to begin collecting HST with confidence? Do you feel the industry and its associations have adequately prepared retailers for the change?

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