Ontario Canada Carwashes, are you readu for an 8% tax hit?!

[bigleo48]

My fellow canucks,

As you may have already heard, the Ontario Government is harmonizing the PST and GST consumption taxes. As you know, carwashing activities were previously exempt from 8% PST, that will now end.

So we who embedded the GST in our pricing (all independents), will either need to bump up prices or eat the 8%. For the Big Oil companies, they don't embed and so it will look like their prices have not increased, but will charge the HST 13% after the fact.

What are you going to do, raise prices or eat it?

BigLeo

 

[easywash]

Ouch....

Bigleo... that hurts... I hope they don't do that out here in BC.

 

[PaulLovesJamie]

I'm not an Ontario canuck so perhaps my opinion doesnt count, but I would raise my price to collect the tax.

Out of curiosity, how do the prices for independents compare to what the big oil washes are charging?

 

[Waxman]

How much would you have to raise your price to cover the tax? If you went from $10 to $11 for your top wash I don't think that would drive too many people away. You have a very nice carwash and can justify 'top tier' pricing.

 

[rph9168]

I had a similar situation in New Mexico went they passed a new law that meant car washes needed to be taxed. We raised the price to include the tax and had a sign made that explained the change. I don't think we even got one complaint other than customers upset with the state for the raise.

 

[bigleo48]

It applies to all carwashes and affects everything we sell, vacs, petwash, air and of course carwashing.

First, raising prices will drive some customers to home washing. But the biggest problem is perception with automatic washes. We are not a gas bar that can charge whatever for a wash and add the tax after the fact. We have an entry system and a hopper that can handle one coin type. The coin type must be the lowest denominator (in our case the $1 coin). So everything has to go up by a dollar to make up for the 8% tax hit. So our signage would show $7, $9, etc. For the big oil companies, their prices on their signage will stay the same as they add the tax after the fact and so the customer may not notice the 8% more in tax at the end. So we look like we raised our prices and they didn't...which is not the case.

Easywash, so far BC has resisted harmonizing the taxes, but it is now looking inevitable for BC. This is because manufacturing companies in harmonized districts can write off their PST from purchases against sales (like with the GST). So now BC is at a disadvantage.

Waxman, we are cheaper that big oil and I want to keep it that way, but will lose the perception of being cheaper. Will need to do a lot of communicating with the customers if we do decide to raise prices.

BigLeo

 

[Whale of a Wash]

In the state of Minnesota, we have a 6% sales tax. While it does take a chunk of money, like all taxes, we are all on the same level in our state . I think at least a dozen states collect taxes from SServes.

 

[pitzerwm]

As you well know we are the only source of revenue for the government. They have no clue about capitalism, so raising the taxes on you is a no brainer because they feel that you are a dirty capitalist that is ripping off the public in the first place. I put up signs and raise my price.

Once, when they were doubling only business's utilities (city owned) I told them, in the public hearing, that it really didn't matter if they tripled it, we would be passing it on to the customer and when they quit paying us because it was too expensive, we would go out of business and move somewhere else or just take our dirty money somewhere else. Needless to say I was on the 6 o'clock news.

 

[rph9168]

It reminds me of the state of Oregon. The tree huggers got many environmental bills passed that were very unfriendly to most companies that manufacture almost any products. As a result many of these companies moved out of the state. Now they are complaining that many state services have been cut and the taxes have gone up. Why? Because they forced many tax paying companies out of the state with their tree-hugging laws.

I am afraid that the current administration may be headed in the same direction only these companies will be forced to leave the country at a time when we can ill afford the job and income losses.

 

[pitzerwm]

We have a city that is as anti business as you can get and it shows on all fronts.

 

[Tom Thumb]

BIGLEO,
Help me out, what is the meaning of GST vs PST?
thanks

 

[easywash]

Taxes

GST = Goods and Services Tax
PST = Provincial Sales Tax

In BC it 5% and 7% but we can claim the GST back.

 

[bigleo48]

Bigleo... that hurts... I hope they don't do that out here in BC.

Easywash,

From the Vancouver Sun

http://www.vancouversun.com/news/Case+harmonized+sales+more+compelling+than+ever/1443749/story.html

Not sure you can really do anything about it, except prepare

BigLeo

 

[easywash]

Bc

I KNOW I KNOW...

I grabbed my coffee this morning, got the paper from the front step and was greeted by the headline:

Case for harmonized sales tax in B.C. more compelling than ever

hat it's only a mater of time before BC Harmonizes it's taxes.

 

[bigleo48]

Easywash

Well, at least I'll be able to let you know how it turns out and the dos and don'ts I discover.

We have a year, so for you I think it's at least 2 years if ever!

BigLeo