RST Information Notice, March 2007

Bill 187 amendments were passed by the Legislature and received Royal Assent on May 17, 2007.

• On March 22, 2007, a number of measures relating to the Retail Sales Tax (RST) Act and its regulations were announced in the 2007 Ontario Budget. The proposed amendments must be passed by the Legislature and receive Royal Assent to become law. This notice provides general information and is not a substitute for the legislation.

Destination Marketing Fees

It is proposed to extend the current RST exemption available for Destination Marketing Fees (DMF) charged on transient accommodation until June 30, 2008. This measure continues the current temporary exemption.

DMFs billed on or before June 30, 2008 would be exempt from the 5 per cent RST charged on transient accommodation.

Rebates For Alternative Energy Systems

A rebate of the 8 per cent RST paid on the purchase of a new solar energy system installed in residential premises, including a multi-residential building, is currently available for the period from November 26, 2002 to November 25, 2007.

A rebate of the 8 per cent RST paid on the purchase of wind energy systems, micro hydro-electric systems and geothermal energy systems installed in residential premises, including a multi-residential building, is available for the period from March 28, 2003 to November 25, 2007.

It is proposed to extend the rebate program for these alternative energy systems to provide a rebate in respect of these types of systems that are purchased and installed in residential premises before January 1, 2010.

Tax Credit For Fuel Conservation

A Tax Credit For Fuel Conservation (TCFFC) of $100 is currently available to purchasers and lessees of new passenger vehicles that use less than 6 litres of gasoline or diesel fuel per 100 kilometres of highway driving. Where a vehicle is leased for a term of at least one year, the TCFFC is provided to the lessee by deducting it from the RST payable on the initial payment and the subsequent lease payments.

It is proposed to amend the RST Act to allow the full amount of the TCFFC to be provided to the lessee at the time the vehicle is acquired, rather than at the time of the lease payments. Under the proposed amendment, the vendor of the vehicle would be allowed to provide the full amount of TCFFC to the lessee and deduct it from the RST the vendor would otherwise be required to remit to the Minister under the Act.

Simplified RST Calculation For Computer Related Services

The Simplified Calculation, a pilot project for small businesses that provide computer program related services, is in effect for the period of April 1, 2006 to March 31, 2007. It is proposed to extend the pilot period to March 31, 2009.

The Simplified Calculation consists of an optional method for calculating RST on sales that include both taxable and non-taxable services related to computer programs. Under the pilot project, where a sale includes both taxable and non-taxable computer program services, the authorized vendor may apply RST at a rate of 6 per cent to all the computer program services included in the sale. See RST Info-Notice – Simplified Calculation of RST for Computer Program Services – Pilot Project dated January 2006 on the ministry's website at www.ontario.ca/revenue.

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.

© Queen's Printer for Ontario, 2007

ISBN 978-4249-3962-6