Nova Scotia HST Rate Change
What is changing?
On October 23, 2024, the NS government announced their plan to lower the HST rate. Please note that this is only a proposed change at this time – there is currently no legislation tabled for this change, and whether this proposed change goes through could depend on the results of the provincial election on November 26, 2024. However, if the change goes through, starting on April 1st, 2025, the province of Nova Scotia will be implementing a 1% harmonized sales tax (HST) rate cut taking it down from 15% to 14% on all eligible goods and services purchased within the province. It might not sound like much but in the words of Nova Scotia’s Premier Tim Houston “this will be the largest tax break in Nova Scotia’s history. It’s the first time in 14 years that a provincial government in Nova Scotia has made changes to the sales tax. And this time it will be a decrease.”
Both businesses and consumers need to make adjustments to help prepare for this change. This blog will break down some on the important points and help you understand what this could mean for you as a consumer and business owner. Let’s dive in.
How to prepare as a business owner
This rate change can have many implications for your business. Here are some key changes to keep in mind:
Pricing in POS systems – it will be important to ensure that your POS system reflects the new tax rate, and that it is applied appropriately across all items within the system. This should be done well in advance of the date that the rate change becomes effective.
Accounting systems – ensure your accounting systems are updated to reflect the new tax rate for accurate invoicing and reporting purposes. Ensure you have time to troubleshoot and test out the updated rates in your system before the rate change becomes effective.
Review contracts – if your business involves contracting and you will have ongoing contracts through the rate change, make sure to assess how the rate change might impact those agreements and adjust accordingly.
Customer transparency – inform your customers about the new rates and how it might affect how they do business with you. Sending clients an email in advance letting them know how prices and contacts will be adjusted moving forward is a great place to start.
How to prepare as a consumer
While preparing for this change as a consumer requires less advance planning, the rate change may affect how you choose to spend and save your money. Here are some pointers to keep in mind as a consumer:
Budget adjustments – if you have a budget you stick to as a consumer, don’t forget to account for the new rate which may slightly alter how much you choose to allocate for your purchases
Adjust your shopping strategies – it is still a long way away, but it can be beneficial to try and time larger purchases when the new tax rate comes into effect early next year
Stay informed – follow news on how this rate change might affect services or government programs, we will continue to do our best to keep you informed on any updates following the news of the rate change
Conclusion
A lot of information and transitional rules are still yet to come out, including expected transitional guidance around how transactions that straddle the rate change date will be impacted. We will be keeping a sharp eye out for any updates and will continue to share any important information.
In the meantime, we recommend checking out the other resources listed below for further information. The most importing thing right now is to stay informed and not have to scramble or rush to make changes when the deadline for this rate change approaches.
Further Resources
Check out the Government of Nova Scotia’s press release on the matter here.
This article by Jeremy Scott Tax Law is also very informative and can be read here.
CBC news also has an article on the rate change and shines a more political lens on the subject but is also a beneficial read especially in the context of the impending provincial election. Read it here.