- The information in this Guide explains how Retail Sales Tax (RST) applies to goods brought into Ontario and the collection of RST by Canada Border Services Agency (CBSA) and Canada Post Corporation. Please note that this Guide replaces the previous version dated March 2001.
Taxable Goods
General
RST applies to the total fair value of taxable goods and services brought into Ontario for own use. The total fair value includes:
- the purchase price (in Canadian funds) of goods bought outside Canada
- delivery, shipping, or mailing charges billed by the vendor (in Canadian funds)
- customs duties and federal excise taxes paid to bring goods into Canada (brokerage charges and federal Goods and Services Tax (GST) are not part of the total fair value)
- any applicable tax for fuel conservation.
If the goods are rented or leased, RST is due on the total amount of the monthly lease payments.
Tax Rate
RST is levied at 8 per cent on most taxable goods and services other than liquor, beer or wine. For liquor, beer or wine brought into Ontario by a returning resident, the RST rate is 12 per cent.
Payment of Tax
A cheque or money order to pay the RST on goods imported from within Canada should be made payable to the Minister of Finance and delivered to any Ontario Ministry of Finance Tax Office, or mailed to the Ministry of Finance, 33 King Street West, PO Box 623, Oshawa ON L1H 8H5. RST on non-commercial goods coming from outside Canada will normally be collected at border crossings by CBSA at the time of importation.
Postal and Deliveries
For goods mailed or delivered to residents of Ontario, RST is collected on goods that have a value equal to or greater than $20. The resident is required to pay the applicable RST to the CBSA or Canada Post Corporation in order to receive the goods.
Residents Returning to Ontario
Collection of RST at Border Crossings
Ontario has an agreement with the federal government to collect Ontario RST at Ontario border points on non-commercial goods brought into Ontario by returning residents and at postal and courier outlets on items delivered to Ontario residents from outside Canada.
Returning Residents
A returning resident is a person who ordinarily lives or carries on business in Ontario and brings taxable goods from outside Canada into Ontario for the person's own use or for others to use at the person's expense. A returning resident does not include the holder of a Certificate of Indian Status identity card and who declares that the taxable goods are for use on a reserve.
Status Indians
Status Indians are exempt from Retail Sales Tax (RST) on goods imported for their own use or consumption on a reserve.
To qualify for the exemption, they are required to show their federal Certificate of Indian Status identity card to the Canada Border Services Agency (CBSA) official at the border and declare that these items are to be used or consumed on a reserve. The official will record the Status Indian's name, card number and band/registry number from the certificate and will not charge RST.
With respect to postal and courier deliveries, CBSA or Canada Post Corporation will collect the RST but will give a refund upon receipt of a copy of the Certificate of Indian Status identity card, accompanied with a statement that the goods were delivered to an address on a reserve in Ontario, for use or consumption on the reserve.
Motor Vehicles
If a returning resident imports a motor vehicle, the resident is not required to pay RST on the vehicle at the border; instead the person registering the vehicle in Ontario will be required to pay RST at the time of registration with the Driver and Vehicle Licence Issuing Office. Motor vehicles do not qualify for the federal personal exemption set out by CBSA.
Federal Exemption
Returning residents pay RST on the value of goods in excess of their federal personal exemption. For any questions regarding the federal personal exemption, please contact the CBSA.
Businesses Importing Goods
General
Businesses that have a Vendor Permit should account for RST on the fair value of goods imported for own use if the out-of-province supplier has not charged the applicable RST. The tax must be reported on line 3 of their periodic RST return.
Businesses without Vendor Permits are required to pay the applicable RST directly to the ministry. Details of the purchase, including a description of the goods, where they were bought, and the total value of the purchase should be sent with the payment.
Motor Vehicles
Businesses licensed with the Ontario Motor Vehicle Industry Council (OMVIC) as car dealers, and registered with the ministry as vendors, must calculate the RST applicable on any new motor vehicles imported for own use, and remit it with their RST returns. The applicable tax for fuel conservation must also be included in the remittance. See RST Guide 513 - Tax for Fuel Conservation. Vendors must keep records to show how the RST was calculated.
All other vendors who import motor vehicles for their own use must pay the RST, and the applicable tax for fuel conservation on new vehicles, at the time the vehicle is licensed in Ontario at a Driver and Vehicle Licence Issuing Office.
Non-resident Contractors
A non-resident contractor is a construction contractor located outside Ontario who has been awarded a contract to perform work in Ontario and who has not kept a permanent place of business in Ontario continuously over the twelve-month period immediately prior to signing the construction contract.
Non-resident contractors are required to pay Retail Sales Tax (RST) on materials and equipment brought into, or purchased in Ontario, for use in the construction contract. They are required to register with the ministry and post a guarantee equal to 4 per cent of the total of each Ontario contract. When this has been done, the ministry will send two copies of a letter of compliance to the contractor certifying that the RST requirements have been met. One copy of this letter must be given to the contractor's customer.
If a copy of the compliance letter has not been provided, the contractor's customer must hold back 4 per cent of all amounts payable to the contractor and pay this amount directly to the ministry. Customers who do not comply with this legislative requirement may be assessed 4 per cent of the contract price or other amount determined by the Minister. See RST Guide 804 - Non-Resident Contractors for more information.
Out-of-Province Suppliers
Out-of-province suppliers who have a "presence" in Ontario and who sell taxable goods or provide taxable services to customers in Ontario are required to obtain a Vendor Permit to collect RST. Businesses that do not have a presence in Ontario, which make sales of taxable goods and services to customers in Ontario may voluntarily register with the ministry for the collection of RST. When determining if a business has a presence in Ontario, the ministry considers factors such as, the existence of a branch office, warehouse or storage facilities, a post office box, employees, agents, etc., located in Ontario.
Settler's Effects
Eligible Individuals
Settlers are considered eligible individuals if they:
- lived outside Ontario for at least one year before moving to Ontario (individuals who keep their Ontario residence during a temporary absence, i.e., less than one year, do not qualify), and
- intend to establish or re-establish a residence in Ontario for more than one year.
Eligible individuals may bring their household goods and equipment into Ontario exempt from RST if these are:
- owned by them for at least 30 days before the move, and
- delivered into Ontario within six months of the move.
Goods or equipment bought after the move, including new or used motor vehicles, are subject to RST.
Eligible individuals moving from another province or territory of Canada, must have paid any sales taxes due to their former province or territory before claiming the Ontario exemption. They must not claim refunds in their former province or territory on goods and equipment brought into Ontario tax-exempt.
Visiting NATO personnel moving to Ontario for at least one year may qualify for this exemption. Please contact the nearest Ontario Ministry of Finance Tax Office for more details.
Businesses
Assets owned by a business may be brought into Ontario without paying RST when the entire business is relocated from another Canadian province or territory. This means that if a business has branch offices in another province or territory of Canada and moves them all to Ontario, the business would be eligible for exemption if the conditions noted below are met.
Businesses in Ontario that open new branches within Ontario, and businesses moving to Ontario from outside Canada are not entitled to the exemption.
Eligible businesses must:
- own the goods or equipment at least 30 days before relocating in Ontario, and
- deliver the goods or equipment into Ontario within six months of relocating here.
To claim the Ontario exemption for goods or equipment brought in from another province or territory of Canada, eligible businesses must have paid any taxes due to that province or territory, and not be entitled to any refund from that province or territory.
Motor Vehicles
Individuals or businesses entitled to the settler's effects exemption on motor vehicles must fill out an exemption declaration (MV-2 form) when licensing a vehicle at an Ontario Ministry of Transportation Driver and Vehicle Licence Issuing Office. Proof that the vehicle was previously licensed in another province, territory, or country is required.
Motor vehicles leased under a long-term lease do not qualify for the settler's effects exemption because the individual or business does not own the vehicle. Retail Sales Tax (RST) must be paid on the remaining lease payments and any amount paid to buy the vehicle at the end of the lease. This requirement also applies to any other taxable leased equipment brought into Ontario.
Exemptions
Taxable goods can be imported exempt from RST by the following purchasers:
- businesses buying the goods, for resale, as part of a regular business
- businesses, or people taking up residence in Ontario (see "Settler's Effects")
- diplomatic organizations, foreign representatives and their family members (individual diplomats are issued a federal identification card stating that they are exempt from provincial sales taxes). See RST Guide 803 - Foreign States, Representatives and Officials for details.
- Status Indians, Indian bands and Band Councils, if the goods and services are bought for use on a reserve. See RST Guide 808 - Status Indians, Indian Bands and Band Councils for more details.
If RST was paid in error, the individual or business can apply for a refund by completing and submitting a General Application for Refund of Retail Sales Tax form to the ministry.
Legislative References
- Retail Sales Tax Act, subsection 2.1(1), paragraphs 1(1)(a), 7(1)43
- Regulation 1012 under the Retail Sales Tax Act, subsection 6(3)
For More Information
The information in this publication is only a guideline and does not replace the legislation. To obtain the most current version of this guide or additional information, please contact the Ontario Ministry of Finance at 1 866 ONT-TAXS (1 866 668-8297), Teletypewriter (TTY) 1 800 263-7776, or visit our website at ontario.ca/finance.
