RST Guide 515, August 2006
- The information in this Guide explains how Retail Sales Tax (RST) applies to satellite dish dealers. Please note that this Guide replaces the previous version dated October 1996.
Supply Only Sales
Vendors who sell the components of a satellite dish system to a customer, without installation, are required to charge RST at the rate of 8 per cent on the full selling price, including any charges for delivery.
Supply and Install Sales
Satellite dishes that are supplied and installed are considered real property if the dishes are permanently affixed to land or to a real property structure such as a building. Although the vendor in these instances is required to pay RST on all equipment and materials that become part of the real property installation, the vendor must not charge the customer RST on the installed dish. The RST paid on the purchase of these items forms part of the cost used by the vendor to determine the selling price.
RST must be collected from the customer on items such as the receiver, controller, tuner and any other equipment used in the system that is not attached to realty and remains free-standing after installation. These items can be purchased by the vendor exempt from RST provided a valid Purchase Exemption Certificate is given to the supplier. (See RST Guide 204 - Purchase Exemption Certificates).
When billing a customer, the charge for the real property portion must be shown separately from the charge for the free-standing equipment. Labour to install the free-standing equipment forms part of the selling price and is taxable.
Rentals
RST is to be collected on the monthly lease or rental payments on items that remain free-standing and satellite dishes that are supplied only. If the rented or leased satellite dishes are supplied and installed by the lessor, RST is to be paid by the lessor on items permanently attached to realty and no RST is charged to the customer for these dishes.
Repairs
Services or repairs to satellite dishes and equipment attached to realty are not taxable if the service or repair is rendered at the customer's premises or at the vendor's premises. If the vendor sends the item to another person for repair, the vendor must pay Retail Sales Tax (RST) to the repairer on the total amount charged, including labour.
If the customer brings in an item for repairs, RST is to be charged on the total invoice amount, including labour, even though the items may become real property or a fixture when the customer re-installs it. The customer is also required to pay RST on any charges to repair or service free-standing equipment regardless of where the service is rendered.
Telecommunication Services
Under the Retail Sales Tax Act, RST applies to the purchase of a taxable service.
The definition of a taxable service includes: "telecommunication services of all kinds, including without restricting the generality of the foregoing, telephone and telegraph services, community antenna television and cable television, transmissions by microwave relay stations or by satellite, and pay television, but not including public broadcasting services that are broadcast through the air for direct reception by the public without charge."
Telecommunication is defined as: "Telecommunication means any transmission, emission or reception of signs, signals, writing, images or sound or intelligence of any nature by wire, radio, visual or other electromagnetic or laser-based system,..."
A taxable telecommunication service includes services where:
- the telecommunication is transmitted from and received within Ontario, or
- the telecommunication is transmitted from or received within Ontario and the charge for the service is billed to a person or resident carrying on business in Ontario.
Fees charged for T.V. channels provided via satellite dishes are considered to be taxable telecommunication services. RST at the rate of 8 per cent is to be charged to customers. If the customer is located outside Ontario and neither (1) nor (2) applies, the vendor is not required to charge RST.
More Information
Telephone
- 1 866 ONT-TAXS (1 866 668-8297)
- Teletypewriter (TTY) 1 800 263-7776
Written Interpretation
To obtain a written interpretation on a specific situation not addressed in this publication, please send your request in writing to:
Ministry of Revenue
Tax Advisory Services Branch
Retail Sales Tax Section
33 King Street West, 3rd Floor
Oshawa ON L1H 8H5
Disclaimer and References
The information contained in this publication is provided only as a guideline and is not intended to replace the legislation.
Legislative References:
- Retail Sales Tax Act, Subsections 1(1), 2(7), 7(3) and Paragraph 7(1)2
- Regulation 1012 under the Act, Section 5
- Regulation 1013 under the Act, Subsection 3(2)
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