Transportation for People with Physical Disabilities

Addendum to Retail Sales Tax Guide #701

Rebate for Vehicles Purchased to Transport Persons with Permanent Physical Disabilities

As announced in the 2004 Ontario Budget on May 18, 2004, the government proposed to transform assistance provided to persons with physical disabilities. Retail Sales Tax (RST) rebates are no longer provided for motor vehicles, purchased or leased on or after May 19, 2004, to transport persons with permanent physical disabilities. The legislation received Royal Assent and became law on December 16, 2004.

RST rebates remain available for qualifying vehicles ordered from a vendor or purchased on or before May 18, 2004, provided delivery occurred before August 1, 2004.

RST rebates also remain available for qualifying vehicles acquired through long-term lease contracts entered into on or before May 18, 2004, provided the purchaser took delivery of the vehicle before August 1, 2004.

As a more effective way of delivering assistance to persons with physical disabilities, the government will increase funding for the Home and Vehicle Modification Program offered by the Ontario March of Dimes funded through the Ministry of Community and Social Services.

Equipment designed solely for the use of people who are chronic invalids or have a physical disability remains exempt. Items such as wheelchair lifts, ramps and tie-down systems installed in a vehicle to accommodate a wheelchair, or hand controls designed to assist drivers who have a physical disability are examples of items that remain exempt from RST. See Ontario Retail Sales Tax Guide 802 Exempt Items for People With Physical Disabilities for more information.

For information on the Home and Vehicle Modification Program, please contact:
Ontario March of Dimes
Home and Vehicle Modification Program
700 Richmond St., Suite 310
London, ON N6A 5C7
Toll-free: 1 877 369-4867
Website: www.marchofdimes.ca/dimes

Guide 701 Transportation for People with Physical Disabilities

• The information in this Guide explains the Retail Sales Tax (RST) refund available on vehicles used for transporting people with physical disabilities.  Please note that this Guide replaces the previous version dated March 2000.

Refund Program

A refund of RST paid is available on certain (new or used) licensed motor vehicles purchased or leased on a long-term basis (12 months or longer) for the purpose of transporting a person with a permanent physical disability.  At the time the motor vehicle is bought and a refund application filed, the purchaser must be:

• a person with a permanent physical disability who bought the vehicle for their own transportation.
  
• a member of the family or the same-sex partner of a person with a permanent physical disability.  The motor vehicle must be purchased by the family member or the same-sex partner for the purpose of providing transportation for the person with the permanent physical disability.  In addition, the person with the permanent physical disability must not own a motor vehicle or lease one under a long-term lease.
  
• a principal caregiver, if the person with the permanent physical disability does not have a member of the family who is willing and able to provide transportation for that person.  The motor vehicle must be purchased to provide, on a regular basis, transportation to the person with the permanent physical disability.  In addition, the person with the permanent physical disability must not own a motor vehicle, nor lease one under a long-term lease.
  
• a religious, charitable or non-profit organization that purchased the vehicle to transport people with permanent physical disabilities.  Municipalities, local municipal boards, and charitable or non-profit organizations established by these bodies, are not eligible for refund under this program.

Person with a Permanent Physical Disability

Under this refund program, a person with a permanent physical disability is a person ordinarily resident in Ontario:

• who is permanently deprived of the use of an arm or leg;
  
• whose mobility within the usual surroundings that he or she lives or works in is permanently restricted to the use of a wheelchair, crutches, braces, or other devices designed to assist mobility; for example, a walker or an electric scooter; or
  
• whose permanent visual acuity in both eyes with proper refractive lenses is 20/200 or less according to measurements taken using a Snellen chart or equivalent chart, or the greatest diameter of field of vision is permanently less than 20 degrees.

Although certain illnesses may result in some incapacity, they will not, by themselves, be considered permanent physical disabilities.  For instance, arthritis, although painful and discomforting, initially is not considered a permanent physical disability.  Fully developed, however, it may lead to the person being permanently restricted to a wheelchair and eligible for a refund.  Other examples are mental illness, neurological disorders, asthma, angina, or spinal disc problems, etc.

Member of the Family

A member of the family is a:

• spouse
• parent, foster parent, father-in-law, mother-in-law
• son, daughter, foster child, son-in-law, daughter-in-law
• brother, sister, brother-in-law, sister-in-law
• grandparent, grandchild
• aunt, uncle, niece, nephew, cousin
• spouse of: aunt, uncle, niece, nephew, cousin
• grand aunt, grand uncle, grand niece, grand nephew
• spouse of: grand aunt, grand uncle, grand niece, grand nephew.

Same-Sex Partner

Effective March 1, 2000, a same-sex partner has the same rights and obligations as that of a spouse as defined in section 29 of the Family Law Act.

Principal Care Giver

A principal caregiver is an individual who:

• is not a member of the family or same-sex partner of the person with the permanent physical disability,
• lives within 40 km of the person with the permanent physical disability, and,
• maintains a caregiving relationship with the person with the permanent physical disability.

Motor Vehicles

RST paid may be refunded if the motor vehicle is licensed under section 7 of the Highway Traffic Act, bought new, used, or leased for a term of 12 months or longer.

RST paid will NOT be refunded on certain vehicles, bought or leased, including:

• all-terrain vehicles
• dune buggies
• motor assisted bicycles
• motor homes
• motorcycles
• snowmobiles
• leased vehicles, if the agreement to lease is for less than 12 months.

RST paid on service and extended warranty contracts, and repairs to the vehicle, is NOT refundable.  Tax for fuel conservation, air condition tax, and the federal Goods and Services Tax (GST) are NOT refundable under this program.

Modifications to Motor Vehicles

The purchaser may also be eligible for a refund of the RST paid on certain modifications made to the motor vehicle.  These modifications must be made only to assist a person with a permanent physical disability.  For example, RST paid on modifications made to a motor vehicle in order to accommodate a wheelchair, such as raising the van roof, lowering the van floor, or installing special doors to accommodate a wheelchair lift, is refundable.

RST paid on modifications made to enhance the appearance of the vehicle, such as pinstriping, wheel covers, and furnishings, is not refundable.

The costs for modifications to a motor vehicle must be listed by the supplier on the invoice and the invoice must be sent in with the refund application.

Accessories, such as wheelchair lifts, ramps, and tie-down systems, are considered to be items designed specifically for the disabled and may be bought exempt from RST for installation in motor vehicles.

Other Conditions

A refund is not available under this program when a motor vehicle is used for business purposes.

Refunds under this program are limited to one per family, OR one per same-sex partnership, OR to one principal caregiver per disabled person.  The same applies to vehicles under long-term leases.  There are, however, four exceptions to this general rule.  A refund may be available if:

• the second vehicle was bought to transport another person with a permanent physical disability;
• the first vehicle has been sold to a person who paid the RST at the time of purchase on the fair value of the vehicle;
• the owner of the first vehicle has been unable to sell or dispose of the motor vehicle within 30 days after the second motor vehicle was bought.  In this case, RST may be refunded only after the first vehicle has been sold or disposed of;
• a divorce occurs and the vehicle is retained by the spouse who is not the person with a permanent physical disability; or will not be transporting the person with the permanent physical disability.  The person with the permanent physical disability, another member of the family, same-sex partner or principal caregiver may in turn purchase a second motor vehicle, if the divorce has been finalized and proof is included with the refund claim.

The restriction on the number of vehicles does not apply to religious, charitable and non-profit organizations.

Dollar Limits

Refunds are limited to the actual amount of RST paid up to a maximum of $2,400 for vans or a maximum of $1,600 for all other qualifying motor vehicles.  The refund limits do not apply to buses.

RST paid on eligible vehicle modifications is refundable in full.

Time Limits

Your application must be received by the Ministry of Revenue within four years of the date RST was paid.

Applications for refund of RST paid on long-term leases should cover a period of at least 12 months.  No more than one refund application may be made in a 12-month period.  The total refund available on leased vehicles is the same as outlined above.

Instructions for Applying for a Refund

Please use the attached application form to claim a refund.

The physician or, if applicable, the optometrist of the person with the permanent physical disability must complete and sign Part 2 on all applications except those made by religious, charitable or non-profit organizations.

Required Documents

Please send in a photocopy of:

1. motor vehicle registration certificate (ownership)
2. purchase agreement, bill of sale, and if applicable, an invoice for modifications, certified by the supplier as paid in full (or copy of cancelled cheques or finance agreement)
   1. for private purchases: Declaration/Receipt of Motor Vehicle Transfer (MV-1)
   2. for leased vehicles: long-term lease contract; receipts for monthly lease payments or letter from leasing company stating the lease period and the amount of RST paid for the refund period claimed.
3. If the applicant is the principal caregiver, he or she must also provide a written statement that he or she:
   1. is the principal caregiver of the person with a permanent physical disability and that no member of the family or same-sex partner is willing and able to provide transportation on a regular basis for that person; and
   2. will use the motor vehicle to provide transportation for the person with a permanent physical disability.

In addition, for religious, charitable or non-profit organizations, a letter signed by an authorized official of the organization stating:

• the vehicle is used to transport people with permanent physical disabilities as described in the eligibility requirements;
• the nature of the disabilities of the passenger(s) and types of mobility aids used; and
• the organization is not a municipality, local municipal board, or an organization established by either of these bodies.

Please allow six to eight weeks for the Ministry to process your application.  Missing documents or information will delay the processing of your claim.

Mail your signed application, with the required documents to:

Ministry of Revenue
Refund Unit
PO Box 630
33 King Street West
Oshawa ON  L1H 8L2

Personal information is collected on the attached form under authority of subsection 48(3) of the Ontario Retail Sales Tax Act, R.S.O. 1990, c. R.31, and will be used to determine eligibility for an Ontario retail sales tax refund.  If you have any questions about this collection or how to complete the application, or wish to obtain additional forms, please write to the above address or call 1 866 ONT-TAXS (1 866 668-8297).

For More Information

The information contained in this publication is only a guideline. For more information, please contact the Ontario Ministry of Revenue at 1 866 ONT-TAXS (1 866 668-8297) or visit our website at ontario.ca/revenue

© Queen's Printer for Ontario, 2001

ISBN 0-7794-0822-5