Smiths Falls hopes for $111K tax exemption
An amended cost-sharing agreement between Smiths Falls and Lanark County will clarify the town’s HST exemption status regarding shared services.
The Canada Revenue Agency audited the county last year and determined that Lanark should have been charging Smiths Falls the HST related to services such as Lanark Lodge, ambulance, and social housing over the past five years.
The county disagreed with the CRA’s interpretation of the HST guide and submitted an appeal, but the $821,000 owed by the town had to be paid while awaiting results. $710,000 was recovered through provincial and federal rebate, and the ruling on the appeal will determine if Smiths Falls can recover the remaining $111,000.
No long-term impact on the town’s budget is expected since the anticipated audit outcome was written into last year’s budget. The amended shared services agreement will be retroactive to January 2020 so the budget for the current year remains protected as well.