Plastic Bags Sold by Retailers

Retail Sales Tax - Tax Tip
Published: March 2009
Content last reviewed: August 2010
ISBN: 978-1-4249-9477-9 (Print), 978-1-4249-9479-3 (PDF), 978-1-4249-9478-6 (HTML)

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.

Minimal Sale Exemption

Sales of taxable goods in Ontario are subject to Retail Sales Tax (RST) unless the total charge for all taxable goods sold as part of the same transaction is less than 21 cents.

Calculation of Tax

Plastic bags are subject to RST if the total amount of the taxable goods, including the bags, is 21 cents or more. For example, a customer buys the following:

chocolate bar	1.00	(taxable)
bananas	1.50	(exempt)
apples	2.00	(exempt)
2 plastic bags	0.10	(taxable)
Total	4.60

RST applies to the total amount of the taxable goods rounded to the nearest cent ($1.10 × 8 per cent = 9 cents).

Plastic bags are not subject to RST if the total amount of the taxable goods, including the bags, is less than 21 cents. For example, a customer buys the following: