Tag: harmonized
Death, Taxes and Taxes on Death
Ontario’s new harmonized sales tax is coming into effect on July 1, 2010. One of its effects will be to impose PST on funeral services: services that have previously been exempted from PST.
According to the harmonized sales tax, funeral services will now be taxed at the rate of 13%, up from 5%. The effect on a $5,000 funeral would be to raise the tax payable from $250 to $650.
The new harmonized tax may also have an effect on prepaid funeral services. According to a May 27, 2009 Toronto Star article, there are 224,257 prepaid funeral contracts in Ontario, and about 1 in 4 funerals in Ontario are prepaid.
The Ontario Minister of Finance has indicated that the government hopes to implement some sort of grandfathering clause, so that funeral services prepaid before a certain date remain exempted from the PST. However, nothing has been finalized yet. The cut-off date would likely be some time before July 1, 2010.
Those considering a prepaid funeral would be wise to complete their plans sooner rather than later. The new tax, like death, is approaching.
Thank you for reading.
Paul Trudelle