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Ontario Retail Sales Tax
Expert: Mario Cywinski
How does the Ontario Retail Tax Purchase Exemption Certificate work? If I am a reseller of purple widgets and buy from a distributor for resale am I exempt from paying the distributor PST/RST by submitting this to them with my order.
From what I understand one does not need to pay PST if you intend to resell the goods but will need to be charged PST if the goods are for personal use.
Mario Cywinski answered:
To answer your question we went to the Ontario Ministry of Revenue's Retail Sales Tax Branch. Here we found that many exemptions exist when it comes to paying the RST.
According to the RST guide, which can be found here http://www.rev.gov.on.ca/english/guides/rst/pdf/204.pdf, the following are eligible for a tax exemption: "Taxable goods and certain taxable services purchased by vendors or wholesalers for resale to others."
It also applies if the goods are farm or hospital equipment, going to be used for religious purposes (as in at a church) and some others. However, the guide notes that: "Vendors are not entitled to claim an exemption on items used for their business or for their own use unless an exemption is provided for under the Act. PECs cannot be used by customers to claim an exemption from RST on real property contracts or on fixtures."
About the author
Mario Cywinski was the Assistant Editor of Canadaone.com and a graduate of Humber College's Journalism Program. Mario is currently the Managing Editor for Canadian Automotive Fleet and Fleet Vans and Trucks magazines, and is a member of AJAC. He has also worked for Trajan Publishing Corporation as a copy editor, and interned at ABC News, OMNI Television and Global TV.