HST to benefit B.C. film industry


While the negative impacts of the HST have garnered much attention, Ken Ghag, executive director for commodity tax at Ernst & Young, told the Straight that the film and television industries will benefit from the taxation change.

Ghag, who has conducted three HST seminars for the film industry, explained by phone that film-production companies—as well as suppliers of catering and lighting—that are currently paying seven-percent PST on rental equipment, props, costumes, and other goods will be able to recover the 12-percent HST after July 1. “That means that yes, they will be paying a higher rate of tax at 12 percent, but the full 12 percent will be fully recoverable by them on their GST returns, which means that effectively they’re not paying that tax,” he said.

Ghag noted that self-assessments will no longer be necessary. “The film-production industry would have before been registered for the provincial sales tax and would have been doing some self-assessing of provincial sales tax for costumes and equipment brought from other provinces [or the U.S.] into British Columbia.”¦And they would have to self-assess provincial sales tax on all that equipment. Well, they’re no longer going to have to do that whole compliance process, so that’s not only going to save them some tax but also some compliance costs,” he said.

Streamlining the filing process will provide additional savings. Ghag explained that now only one return, auditor, and administrator will be required instead of two of each.

Ghag added that companies do need to meet some accounting requirements and take internal steps in order to benefit from the HST.

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I'm in the film industry and hate the hst. Just wait until this guy realizes that Ontario will be in charge of our film tax credits. Ontario, if you don't know, is competing with bc for films. I wonder how willing Ontario would be to help BC get new films/tv?

Also, much more difficult to get much higher up front costs from the client under the belief that maybe in 4-5 months they may get a rebate cheque?

Also, most jobs in the film industry are service orientated. Actors, accountants, film locations, consultants, editors, storyboards, etc. etc. These will all be more expensive. Also, the film rental companies have most of their equipment already... they now need to charge more without getting savings themselves.

And let's not forget the cg film industry that only has computers as the cost and almost entirely has their budget consist of technical staff... so no rebates in comparison to the extra cost.

Rating: +11
The BC film industry has lobbied gov't for years to enable production companies to recover PST as a favourable competitive condition in BC. Introduction of the harmonized tax has accomplished this, and there is already plenty of anecdotal evidence that more production has located to BC as a result. This is particularly important to BC's competitive position in light of the fact that BC's tax credits are not as rich as other jurisdictions, especially BC's key competitor, Ontario. Although a higher consumer tax can be distasteful, with no jobs there is no consuming anyway. The HST is undoubtedly a factor in film industry job creation in BC.
Rating: +4
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