JULY 2010 THE RIDER/ 5 HST Will Affect Equiculture
While the tax pundits proclaim the benefits of the HST for the farming com- munity, those in the horse business may not be so lucky. The horse economy is on the front lines with the consumer, flirting at the edge of agriculture and dealing with a largely recreational-based industry in the province. Outside of the racing industry, most people involved with equiculture that are not considered farmers through merits of breeding and raising horses are ultimate- ly consumers, and it’s the consumer that the HST will hit the hardest.
Keith Currie is with the Ontario Fed- eration of Agriculture. He represented the farming industry at a recent HST informa- tion evening hosted by the Ontario Eques- trian Federation in Richmond Hill. Currie sells 800 acres of horse hay in the Colling- wood area, and with the horse industry as his largest client he’s concerned about the downstream impact of the HST on his busi- ness. “You folks buy products from us,” acknowledged Currie.
support their horse habit it may mean a few less lessons, one less horse, one less show or fewer tanks of gas for the rig.
Kathy Fremes is the Chair of the Horse Facilities Advisory Council with the Ontario Equestrian Federation as well as a commercial stable owner in the Stouffville area. One of her concerns is with the possible proliferation of underground activity: “A sector will go underground and flourish. You’ve got to be prepared for that,” she told the audience. At 13 percent she wondered if it may be now worth the risk for some to do so where it wasn’t worth it at five percent.
Fremes also considers the larger gap that will be created between the very small horse businesses – those who do not meet the $30,000 income threshold – over larger operators, since small operators are not required to register for the HST and are therefore able to offer a 13 percent competitive advantage to customers. For a $50 riding lesson, that’s a $6.50 difference that adds up to $325 over the course of a year with weekly lessons. Some members of the audience had accepted prepayment for riding lessons or horse camps. If they signed the package before May 1, 2010, they
were advised that all is good. If the fee was paid after that date they’ll have to go back to the client for the extra eight percent or pay it out of pocket. Tony Raguseo and Elaine Watson of Turack, Raguseo, Lesti & Gilliatt LLP Chartered Accountants, flanked Currie on the panel at the presentation. “It’s becoming frustrating for accountants,” says Raguseo, as they are pres- sured to become tax experts in an area that even the specialists still find diffi- cult.
As far as administration goes, most accounting packages can handle the transition easily; Raguseo sees cash flow as the major implication of the HST. If you’re selling a lot of products you’ll want to file quarterly or annually, but if you’re buying you’ll want to file monthly. You can only change your filing times once a year so consider this carefully or you’ll have to wait a year to change it back.
The rule of thumb is that, if it was GST’able before, it will be HST’able as of July 1, 2010.
©2010 Karen Dallimore. All rights reserved.
According to the 2006 census there are 380,000 horses in the province eating and sleeping on just shy of $200 million worth of hay, grain and bedding annually, with an annual overall economic impact of $675 million.
So what are the equine implications of the HST? For those in the horse industry who run a farm business, it will mean a bit more paperwork and a change in cash flow, but ultimately not a lot of difference in the long run, explained Currie.
If you’re not a farmer and you’re involved with the recreational or service side of the business, it means there are going to be a few adjustments as your cus- tomers get used to the extra tax. They’ll be paying eight percent more for their lessons, vet, farrier, board, and any other service that is not agriculturally related that was previously only subject to GST.
For those who cannot dig deeper to
Sermon on the Mount at
REACH Huron
June 25, 2010: Clinton, ON. The REACH Huron arena was the location for ‘Sermon on the Mount, where Dr. Lew Sterrett showed the 300 spectators’ Lessons of Life and Leadership from the Language of the Horse’.
Sterrett has served as the Executive Director of Miracle Mountain Ranch Mis- sions, Inc. located in northwestern Pennsyl- vania from 1977 - 2010. He has also pro- moted safety in public riding programs, serving as President of the Certified Horse Association for 7 years. A licensed pastor, certified Youth, Marriage and Family Counselor, he earned his PhD from North Tennessee Seminary in 2007.
Presented by the Fellowship Bible Chapel of Londesborough, Dr. Sterrett’s presentation explained basic relational prin- ciples which govern all human relation- ships. Using Human Equine Analogies in Relational Training (H.E.A.R.T.). Sterrett illustrated training techniques for commu- nity leaders as well.
The Regional Equine & Agricultural Centre of Huron Inc. (REACH) is a non- profit corporation functioning as a “motel for education”, offering innovative pro- gramming, as well as recreational activities to support the equine, agricultural and other industries.
Dr. Lew Sterrett at REACH Huron
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