RST Information Notice, January 2000

It has been the long-standing policy of the Retail Sales Tax Branch (the Branch) that toner and developer supplied to customers under photocopier price-per-copy service agreements are consumed by the vendor in the provision of the service. Accordingly, the vendor of the service was required to pay retail sales tax (RST) on the cost of the toner and developer.

As the result of a recent legal decision, the Branch has reviewed its policy and now considers the customer to be the consumer of the toner and developer, if the customer is charged for the toner and developer. Therefore, effective immediately, vendors may purchase toner and developer exempt from tax as goods for resale, if the service agreements indicate that customers are purchasing toner and developer. To receive the exemption, vendors should give properly completed Purchase Exemption Certificates to their suppliers. Vendors must continue to pay RST on their cost of consumable parts (e.g. drums, rollers, blades) provided to customers under price-per-copy agreements.

RST will continue to apply to any cents-per-copy charge to the vendor's customers.

Vendors who have paid RST on their purchases of toner and developer may apply for a refund of the tax paid, provided they also charged RST to their customers and the service agreement indicated that the customers were purchasing toner and developer. To apply for a refund of the tax paid within the last four years, vendors should complete a "General Application for Refund of Retail Sales Tax" form. This form and additional information may be obtained by contacting your local tax office listed in the blue pages of your telephone directory, or on the Internet at www.ontario.ca/revenue.