Harmonized Sales Tax : Relief and credits provided

• It is proposed that, starting July 1, 2010, Ontario's Retail Sales Tax (RST) would be converted to a value-added tax structure and combined with the federal Goods and Services Tax (GST) to create a federally administered single sales tax. The single sales tax would have a combined tax rate of 13 per cent.
 
• This would significantly reduce the administrative burden on businesses that currently must comply with two separate tax rules. Ontario businesses would save more than $500 million a year in compliance costs.

• Transition support for small businesses :
 Ontario would provide one-time transition support to small business in the form of a small business transition credit. 
 

Total Taxable Revenues in First Full Fiscal Quarter Commencing After June 30, 2010	Amount of Transition Credit
Up to and Including $15,000	$300
Over $15,000 and Up to and Including $50,000	2% of Taxable Revenue for that Quarter
Over $50,000 and Up to and Including $500,000	$1,000

• Transition support for people:

1.  Benefits would be delivered to eligible Ontario tax filers aged 18 and over in each of June 2010, December 2010 and June 2011, totaling a maximum of $300 for single people and $1,000 for single parents and couples.

2.  Each maximum benefit would be reduced by five per cent of the recipients' previous year's adjusted family net income over $80,000 for single individuals and over $160,000 for families.

3. To qualify for the two benefits in 2010, a 2009 tax return would have to be filed, and a 2010 tax return would have to be filed for the June 2011 benefit.