Business Start-up and Registration - Retail Sales Tax
Purchasing an Existing Business
If you purchase a business from someone else, you must obtain your own Retail Sales Tax (RST) Vendor Permit
. A Vendor Permit cannot be transferred.
When a person or entity (partnership or corporation) sells their business through a sale in bulk to which the Bulk Sales Act applies, that person or entity must obtain a Clearance Certificate from the Ministry of Revenue to confirm that all RST collectable or payable by that person or entity has been paid. When you purchase a business, you must obtain a copy of a Clearance Certificate from the person or entity selling the business. A Clearance Certificate lets you know that the business you are purchasing does not have any known RST liabilities with the branch.
When you contact us, we will ask if any taxable business equipment will be included with the business purchase. If this equipment is not for resale, you must pay RST on this equipment. This is commonly known as RST "chattel tax".
Examples of taxable business equipment (chattels) include:
- office equipment and furniture, such as desks, filing cabinets and computers
- office supplies
- cash registers
- tables and chairs
- cutlery and dishes
A Clearance Certificate Checklist is available to assist sellers and their representatives in submitting a request. The checklist provides further details and information that should be included in the written request for a Clearance Certificate. All requests for Clearance Certificates must be made in writing at least two weeks before the sale takes place.
For additional information, refer to Small Business Pointer 901 - The Basics of Retail Sales Tax.
