Tax Tip, Retail Sales Tax
February 2009
ISBN: 978-1-4249-9029-0 (Print), 978-1-4249-9031-3 (PDF), 978-1-4249-9030-6 (HTML)
Requirement to Collect Tax
Vendors are required to collect the Retail Sales Tax (RST) on the sale of all taxable goods and taxable services.
This means if a vendor sells any business assets, such as machinery or office equipment, etc., it must collect RST on the sale regardless of whether the transaction may be considered outside its ordinary course of business.
Legislation
The Retail Sales Tax Act (Act) defines a "vendor" to mean a person who in the ordinary course of business:
- sells or licences tangible personal property (TPP),
- or sells or renders a taxable service.
The Act states that "every vendor is an agent of the Minister and as such shall levy and collect the taxes imposed by this Act upon the purchaser or consumer."
Sale in Bulk
Where there is a sale of assets through the sale or closure of a business, the Bulk Sales Act may apply. The Bulk Sales Act defines a "sale in bulk" as the sale of stock (i.e., fixtures, goods, chattels) in bulk out of the usual course of business or trade of the seller. Vendors that sell their businesses should ensure that they follow all the guidelines listed in the Retail Sales Tax Clearance Certificate Checklist.
More Information
If you need more information on this topic please see Small Business Pointer 901 – The Basics of Retail Sales Tax.
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
