Ontario HST on magazines goes ahead, but subs prepaid before July 1, 2010 are exempt

Ontario has released information on the transitional rules concerning the new harmonized sales tax and, as expected (or feared), there is no exemption for magazines. As of July 1, 2010, the cost to consumers of single copies and subscriptions will go to 13% as the new tax blends the provincial retail sales tax (PST) of 8% and the federal goods and services tax (GST) of 5%. That's the bad news.

The good news is that the province will not apply the tax to prepaid subscriptions, as it had previously planned to do. This is the result of some considerable lobbying by Magazines Ontario. So magazines should be thinking of a major circulation drive in advance of July 1 2010 with the pitch to consumers that by buying now, they'll save themselves the equivalent of $2.40 on an annual $30 subscription. Even better if they can be convinced to buy 2- or 3-year, or even lifetime, subs.