The Ontario Retail Sales Tax

The general Ontario retail sales tax rate (RST)is 8%. other RST rates for certain goods and services are:

• accommodation for a period of less than one month - 5%
• admissions of more than $4 to places of amusement - 10%
• alcoholic beverages sold through licensed establishments - 10%
• alcoholic beverages that are sold through retail stores - 12%
• alcoholic beverages taken from your inventory for your own use or provided free of charge - 12%

You can claim an exemption from RST for any taxable goods or taxable services, (that you purchase and intend to resell, such as your inventory) except parking, transient accommodation and prices of admission.

Some goods may be purchased without paying the RST(rules apply. Examples of RST exemptions include: goods purchased for resale, production machinery and equipment purchased for the use of a qualifying manufacturer, hospital equipment purchased by a qualifiying hospital, goods incorporated into goods for resale.

Proposed Harmonized Sales Tax (HST)

As announced in the 2009 Ontario Budget, the Provincial Sales Tax (PST) will be replaced with a more modern, value-added tax that will be combined with the federal Goods and Services Tax (GST) to create a Harmonized Sales Tax (HST) for Ontario, effective July 1, 2010.

The provincial portion of the HST will be eight per cent and the federal portion will be five per cent, for a combined HST rate of 13 per cent.

Examples of non-taxable (RST) services:

• dry cleaning
• carpet and upholstery cleaning
• personal services, such as hair styling, barbering, and beauty treatments
• medical and health services
• veterinary care
• car washing and engine shampooing
• labour to install or repair real property or fixtures.

source www.rev.gov.on.ca

Real Property Examples

Real property is land and any items permanently attached. Real property is not taxable (RST).

• buildings
• driveways
• roads
• fences
• in-ground swimming pools
• patios.

source www.rev.gov.on.ca

Ontario Employer Health Tax

Current tax rates
Total Annual Ontario Remuneration
- up to $200k 0.98%
- over 200k - 230k 1.101%
- over 230k - 260k 1.223%
- over 260k - 290k 1.344%
- over 290k - 320k 1.465%
- over 320k - 350k 1.586%
- over 350k - 380k 1.708%
- over 380k - 400k 1.829%
- over 400k 1.95%

Eligible employers do not pay tax on the first $400,000 of annual Ontario payroll. If you are associated with another employer, you have to share the tax exemption. They include:

• private sector employers
• organizations that received financial assistance from any level of government but are not under control of government, and
• Crown corporations subject to tax under Part 1 of the Income Tax Act (Canada).

Source: www.rev.gov.on.ca