RST Status of Agricultural Field Identification Cards
Information and Disclaimer
This interpretation letter was issued based on the specific circumstances or situation of a taxpayer or vendor and the law and tax policy in effect at the time the ruling was issued. Specific facts relevant to your situation may change the application of the tax. In accordance with the Freedom of Information and Protection of Privacy Act, all confidential and identifying information has been removed from this interpretation letter. Please be aware that any statute or policy referred to in this letter may have been superseded. Where a letter contains links to a retail sales tax publication, the link is to our current publication on that subject, regardless of the date that the ruling was originally issued, and the current publication may not be reflective of the information originally provided. In no event shall the Government of Ontario be liable for any damages whatsoever arising out of, or in connection with, the use of the information contained herein.
Interpretation Letter AG-0012, April 2000
Thank you for your facsimile transmission of February 11, 2000, regarding the application of Ontario retail sales tax (RST) to your client's products. We acknowledge receipt of your client's letter of authorization to communicate with you in this matter.
Understanding of Facts
It is our understanding that your client is a registered vendor with Retail Sales Tax Branch and is in the business of producing a new agricultural product. Your client produces "agricultural field identification cards" which consist of an aluminium plate and metal post. At the time of sale the farmer's name, field number and acreage of the field are engraved on the plate. The identification card is designed to be affixed at the entrance of each a specific farmer's field to identify it and reduce the risk of mistakenly spreading the wrong herbicide on the field.
Legislation and/or Administrative Policy
Paragraph 7(1)13 under the Ontario Retail Sales Tax Act (the Act) provides an exemption for farm implements, farm machinery, farm equipment, agricultural products and repair parts, as defined by the Minister, that in his or her opinion are to be used by a person engaged in the business of farming.
Section 1 of Regulation 1012 under the Act provides the following definition and states, in part:
"Farm implements", "farm machinery" and "farm equipment" include all implements, machinery and equipment designed for farm use and ...".
Analysis
Your client's "agricultural field identification cards" would meet the definition of farm equipment if the farmer's name, field number and its acreage are engraved on the card at the time of sale to a person engaged in the business of farming. Farmers purchasing the identification cards from your client must provided a properly completed Purchase Exemption Certificate (PEC) or may use a rubber stamp certificate in the form outlined on page 3 of the enclosed Retail Sales Tax Guide 807 - Farmers.
Conclusion
Your client must charge, collect and remit RST on the selling price of agricultural field identification cards unless sold to a person engaged in the business of farming that provides your client with a properly completed PEC. The sale of the cards to persons not engaged in the business of farming are subject to RST.
If you have any further questions, please contact our office.
ISBN 0-7794-2507-3
© Queen's Printer for Ontario, 2002
