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PST refunds for an Ontario not-for-profit

Expert: Pierre Bedard

Azhur asked:

A not for profit organization paying PST on capital project is allowed to file a return to recover the PST (Ottawa, Ontario) taxes paid? My question is can they get the exemption at source by filing a blanket exemption certificate and save themselves all the extra hours of work (and the costs)?

Pierre Bedard answered:

Eligible organizations can recover the PST paid on capital projects as a refund, but non-profit organizations do not necessarily qualify. So the organization must ensure that it is entitled to an exemption under the act; a charitable organization would be entitled to an exemption, but a non-profit organization would not.

Since this is not an exemption at the point of sale you cannot file a blanket exemption certificate; qualifying organizations are not entitled to purchase building materials or anything else exempt of tax. To qualify for a refund you have to prove that you meet the criteria and submit receipts showing that the tax was paid.

In other words, you pay and then through the refund process it is determined whether the organization qualifies for a refund. There is no way to avoid the extra calculations and paperwork as this process must be followed.

About the author

Pierre Bedard is a Tax Advisory Specialist with the Retail Sales Tax Branch of the Ontario Ministry of Finance.

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