Tobacco Products Exempt from Retail Sales Tax

Information Notice 17
Published: June 2002
Content last reviewed: August 2010
ISBN: 0-7794-3267-3 (Print)

Notice to the reader: For Retail Sales Tax (RST) – On July 1, 2010 the 13 per cent Harmonized Sales Tax (HST) took effect in Ontario replacing the existing provincial Retail Sales Tax (RST) and combining it with the federal Goods and Services Tax (GST). As a result, RST provisions described on this page and in other publications ended on June 30, 2010.

Effective July 1, 2010 this publication was archived for RST purposes only. Use caution when you refer to it, since it reflects the law in force for RST at the time it was released and may no longer apply.

On June 17, 2002, the Minister of Finance proposed tobacco tax rate increases and changes to the structure of tobacco taxation. Specifically, tobacco would be exempt from retail sales tax (RST) and there would be an equivalent increase in rates under the Tobacco Tax Act. This means that tobacco products sold to consumers in Ontario will no longer be subject to RST.
This notice explains the RST changes.

Retail Sales Tax - Exemption

Effective June 18, 2002, if you sell tobacco products in Ontario, you will no longer be required to charge RST on your retail sales of tobacco products, including cigarettes, cigars, cut tobacco, chewing and raw leaf tobacco, and snuff.

Any RST charged on the sale of these products prior to June 18, 2002 must be remitted on your next RST return.

RST continues to apply to the sale of tobacco-related items, such as pipes, cigarette holders or clips, rolling papers, and filters.

For More Information

For more information regarding RST, please contact the nearest Ontario Ministry of Finance Tax Office listed in the blue pages of your telephone directory, or visit our website at ontario.ca/finance. For more information regarding Tobacco Tax, please contact the ministry by calling 1 866 ONT-TAXS (1 866 668-8297).