On July 1st, 2010, the Federal Government is introducing the concept of a Harmonized Sales Tax (or HST), which replaces the familiar PST + GST system, in Ontario and BC.

The HST will be applied on most supplies of goods and services made in Ontario at a rate of 13%, consisting of the 5% federal portion and an 8% provincial portion. (cra-arc.gc.ca)

Previously, web designers would not be required to charge clients (hence not remit) PST, as web design work falls under exemption stipulations. Exceptions exist, of course, when physical counterparts to web-work (e.g. DVDs provided to clients) or executable programs come into play, but as a general rule, “if it’s digital, no PST required”.

Web design in Ontario and BC has had a decent gig; no requirement to charge a total higher tax amount (PST+GST) means happier clients. But with the new taxes in play, web designers will be required to swallow a tougher pill, potentially billing their clients an additional 8%.

For more information, please visit the Canada Revenue Agency website.