The First Nations of Ontario and the province have entered into a memorandum of agreement to work together to find a way to continue the First Nation point of sale tax exemption within the framework of the Harmonized Sales Tax (HST).
The HST is due to come into effect on July 1, 2010, threatening First Nations' exemption under the retail sales tax for goods purchased by status Indians on and off-reserve. The federal government will administer the HST, which it handles in the same way as the Goods and Services Tax (GST), where off-reserve purchases of goods are only exempt if they are delivered to the reserve by the vendor or the vendor's agent.
Through the agreement, the government of Ontario commits to working with First Nations to engage the federal government to ensure the point of sale exemption is retained. This will involve addressing concerns raised by the federal government over data and accounting requirements for the administration of the HST.
The goal is to achieve a resolution with the federal government by July 1. If that date is not met, the current agreement recognizes that interim relief may be necessary until the point of sale exemption can be restored.
The memorandum of agreement must be presented to the First Nations leadership in Ontario to be ratified at a Chiefs Assembly as early as possible.
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