RST Information Notice, March 2003

About this Notice

On March 27, 2003, a number of measures relating to the Retail Sales Tax Act and its regulations were announced in the 2003 Ontario Budget. The measures would become effective upon enactment by the Legislature.

Rebate for Alternative Energy Systems

The proposed measures would extend the Retail Sales Tax (RST) rebate for solar energy systems installed in residential premises to include wind energy systems, micro hydro-electric energy systems and geothermal energy systems, as prescribed by the Minister. Rebates would be available for qualifying alternative energy systems purchased and installed on or after March 28, 2003 and on or before November 25, 2007.

Rebate for Vehicles Powered by Alternative Fuel

Currently the maximum RST rebate amount for hybrid electric vehicles and vehicles powered by alternative fuels, other than propane, is $1,000. The proposed measures would increase the maximum rebate amount for hybrid electric vehicles and vehicles powered by alternative fuels delivered to the purchaser on or after March 28, 2003 to $2,000. The maximum rebate for vehicles powered by propane would remain at $750.

Rebate on Capital Investments by Charities

The proposed measure would update the RST rebate that is currently available to religious, charitable and benevolent organizations for capital investments. The proposal expands eligibility to qualifying religious, charitable and benevolent organizations that enter into an agreement to construct a facility that they will lease on a long-term basis immediately upon completion.

To qualify:

• the building must be transferred to the organization immediately following substantial completion
• the building must be leased to the organization for at least 20 years, and
• the organization must have the right to acquire the building for nil or nominal consideration at the end of the lease.

All other eligibility rules for the rebate would remain unchanged.

The new rules would apply to contracts entered into after March 27, 2003. As a transitional rule, partial rebates would be available for contracts entered into on or before March 27, 2003, based on the portion of the contract price paid after March 27, 2003.

Consultation with Ontario Carriers

Plans were announced in the 2003 Ontario Budget to consult with the Ontario trucking industry on the merits of extending the modified RST system currently in place for multijurisdictional vehicles registered under the International Registration Plan to all heavy commercial vehicles.

Simplification of the Purchase Exemption Certificate System

The 2001 Ontario Budget announced the Ministry of Revenue's commitment to improve customer service and cut red tape. After consulting with taxpayers and other interested groups, changes to the Purchase Exemption Certificate (PEC) system have been proposed, including:

Simplification

• Remove the requirement for the purchaser's signature
• Remove the requirement to list the goods, services, contracts of insurance or benefits plan for which an exemption is being claimed
• Implement a checklist to identify the reason for which an exemption is being claimed
• Eliminate the expiry date for blanket PECs

The proposed changes would come into effect when the enabling regulations are filed.

Farmer ID Cards

Currently, qualifying farmers may issue a PEC to purchase eligible farm-related equipment, supplies, and building materials. The measures proposed would allow farmers to use their ID card in place of a PEC when purchasing eligible farm equipment and supplies exempt from RST. Prior to implementing any changes, the Ministry of Revenue and the Ministry of Agriculture and Food plan to consult with farm organizations.

Waivers

The proposed measures include a waiver provision consistent with the existing legislation in the Corporations Tax Act and the Employer Health Tax Act. Waivers allow taxpayers time to get additional information to support their position, without a concern that an estimated assessment will be issued in the interim. Waivers ensure that the start date and end date of the audit period remain constant, regardless of the date on which the audit is either started or completed.

For More Information

For more information, please contact the nearest Ontario Ministry of Revenue Tax Office listed under Taxes - Provincial (Retail) Sales Tax in the blue pages of your telephone directory, or visit our website at www.ontario.ca/revenue.

ISBN 0-7794-4619-4

Queen's Printer for Ontario, 2003