Que. buys exempt from QST

The head of the Institute of Canadian Advertising says many questions about the new Quebec Sales Tax and how it applies to the advertising industry have been answered, but that it may be some time before all issues are resolved.ICA President...

The head of the Institute of Canadian Advertising says many questions about the new Quebec Sales Tax and how it applies to the advertising industry have been answered, but that it may be some time before all issues are resolved.

ICA President John Sinclair met with Revenue Quebec shortly after the 4% qst went into effect on July 1.

As a result of the meeting, Sinclair says he learned the entire national media buy from a Quebec agency will not be taxable across the board.

He says that even though the letter of law states that would be the case, Revenue Quebec is allowing the tax to be pro-rated.

If Quebec circulation is 20% of the campaign, then 20% of the total placement would be taxed.

The guidelines for the qst contain a lot of twists and turns.

Sinclair says the tax does not entirely harmonize with the 7% gst because not all of the same things are taxed.

Although it is refundable to registered companies, it is also not completely flow-through.

Sinclair says that every scenario is different and depends on whether resident or registered companies are involved.

For example, he says that if an agency outside Quebec placed an ad in the newspaper, La Presse, it would have a zero rating and tax would not be charged.

An outside agency registered for the tax would be required to pay the 4% qst.

Quebec agencies do not pay the tax on a media buy, but they must charge their clients. Advertisers that do their own media buying are also taxed.

The Toronto-based ica will be keeping its membership up-to-date with bulletins, and last week held a seminar to pass along the most current information.