TAX NEWS - 2010

British Columbia Tax: B.C. HST credit

As the HST comes into effect on July l, about 1.1 million British Columbians will start receiving the new quarterly B.C. HST credit, Finance Minister Colin Hansen announced today.

"We recognize people will pay more under HST for some goods and services, and the B.C. HST credit ensures that people with low and modest incomes will get help with these costs," said Hansen.

British Columbians with incomes up to $20,000 will receive an annual HST credit up to $230. Families with incomes up to $25,000 will receive an annual B.C. HST credit up to $230 per family member. The first cheques will be distributed the week of July 5, 2010. The B.C. HST credit will be in addition to the GST credit of up to $381 and the $105-per-adult B.C. Low Income Climate Action Tax Credit that those with low and modest incomes now receive.

To further reduce the tax burden for B.C. families, effective Jan. 1, 2010, the basic personal tax credit was increased to $11,000, an increase of $1,627 from 2009 that puts $80 back in the pockets of individuals and up to $160 for those claiming spousal credits.

The introduction of the HST follows numerous tax cuts since 2001. As a result, B.C. has the lowest provincial personal income taxes in Canada for those earning up to $118,000. For example a family of four with an income of $30,000 has over $700 more in their pocket this year from income tax cuts alone.

The HST system includes other measures to help minimize the impact on consumers. For example:

* Consumers won't pay HST on any goods or services that don't have GST now, including basic groceries, residential rent, prescription drugs and most health, medical and dental services - to name just a few.

* Consumers won't pay the seven-per cent provincial part of the HST on motor fuels, books, children-sized clothing and footwear, children's car seats and car booster seats, children's diapers and feminine hygiene products.

* Purchasers of newly built homes will be eligible for a rebate up to $26,250 through a provincial new housing rebate. There will be no HST on used residential housing.

* Consumers will not pay any more to heat or power their homes because of a new provincial credit for residential energy, equal to the seven-per cent provincial portion of the HST.

"The B.C. HST credit ensures low- and modest-income British Columbians are protected from the additional costs of HST, even as they stand to benefit from the jobs and higher incomes that come with a stronger, more productive economy," said Hansen. "The B.C. HST credit will be added to the tax cuts we've made since 2001 and give low-income British Columbians a helping hand with the taxes they pay."