OHRMA: Liquor Prices to Rise With HST

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TORONTO — There’s been a great deal of talk about the blended HST tax lately, but in a recent Ontario Restaurant, Motel, & Hotel Association (OHRMA) newsletter, the organization explained how the new levy will affect what the province’s restaurateurs pay for liquor.

When Harmonized Sales Tax — which combines provincial and federal taxes — is introduced in July, the tax charged on liquor will decrease in Ontario. The news sounds promising, but it’s not. Here’s why: right now bars and restaurants add 10 per cent retail sales tax (RST) and five per cent GST to all liquor sales, but with HST the provincial portion of tax will decrease from 10 per cent to eight per cent, while HST will add 13 per cent to liquor sales. Here’s the caveat: since the government expects to lose money when the provincial portion of taxes decreases, the levies built into the base price operators pay for beverage alcohol will increase.  

ORHMA has had little luck affecting change in this area but encourage concerned parties to contact local MPPs and Premier McGuinty to voice their concern.

For more details, click here.

 

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