Tax refund for a power take-off

A power take-off (PTO) operation refers to auxiliary equipment added to a licensed motor vehicle that uses clear diesel fuel or gasoline from the vehicle’s fuel tank(s) to operate PTO equipment, such as:

• cement mixers
• aerial buckets, lifts and cranes
• refrigeration units
• power vacuums, pumps and blowers

If you paid tax on fuel used in Ontario to operate auxiliary PTO equipment, you may be eligible for a refund.

Getting a refund

You may get a refund on the tax you paid on clear fuel or gasoline used for a PTO operation if all the following conditions are met:

• the motor vehicle is licensed under the Highway Traffic Act
• use of the auxiliary equipment occurs in Ontario
• the auxiliary equipment is powered using the same fuel tank that is used to power the motor vehicle
• the power from the auxiliary equipment is not used to propel the motor vehicle
• the motor vehicle is not principally used to transport passengers
• the auxiliary equipment is not used for personal use, pleasure or recreation
• tax has been paid to Ontario in respect of the fuel used during the PTO operation

The Ministry of Finance (ministry) must receive your filed refund within 4 years from the date you paid the tax.

Calculating a refund

If you use an Engine Control Module (ECM) to monitor and record PTO use in your vehicle(s), you can submit the ECM readings with your refund application to determine the PTO refund.

If you do not use an ECM, we will calculate your PTO refund by applying a pre‑determined percentage allowance against the total fuel disbursed to the licensed vehicle containing the qualifying auxiliary equipment. The following PTO allowance chart gives the ministry allowances established according to an activity type.

Please contact the ministry at 1-866-ONT-TAXS (668-8297) if you do not see your equipment type listed or are uncertain which allowance may apply to your business.

Interjurisdictional carriers

If you are an interjurisdictional carrier licensed under the International Fuel Tax Agreement (IFTA) and applying for a PTO refund, the refundable portion is calculated on the total distance travelled in Ontario during the claim period. The following example will help to explain how this will affect your refund:

• assume that total travel of 10,000 km is reported within the quarterly period
• Ontario travel is 2,000 km (out of the 10,000 km) accounting for 20% of the total
• the fuel tax rate in effect for the quarter was 9 cents per litre
• a ministry-approved allowance determines PTO activity accounts for 1,000 litres of fuel
• the PTO litres are multiplied by the proportion of Ontario travel
  • 1,000 litres × 20% = 200 litres
• this result is then multiplied by the tax rate to arrive at the refund
  • 200 litres × $0.09 = $18.00

The IFTA program apportions tax on behalf of licensed carriers to the jurisdictions where travel is reported. In this example, Ontario retains 20% of the tax paid on fuel purchases and 80% is then shared by the other affected jurisdictions. As an IFTA licensee, your tax refund is limited by the same proportion of tax that Ontario has received.

Downloading the application

1. Download the application form relevant to your claim period: Auxiliary Equipment Refund – PTO Activity on or after July 1, 2017
2. Refer to the accompanying guide: Guide for completing the application – PTO Activity on or after July 1, 2017
3. Complete the application and mail to the ministry at the address noted below and be sure to include any supporting documents. Keep one copy for your records.

Send your application package to:

Ministry of Finance
Account Management and Collections Branch
33 King Street West
PO Box 625 
Oshawa ON L1H 8E9

Direct bank deposit

Get your Ministry of Finance refund or rebate faster with direct deposit. It’s easy and secure.

Download: Direct Deposit Request / Direct Deposit Authorization

Refunds under $500

If the total of all refunds claimed for a calendar year does not exceed $500, you do not need to send supporting records with your application. Please note that you must keep all the information relating to the refund for 7 years and provide them if the ministry audits you.

Records and receipts

You must have accurate and verifiable records of your fuel purchases to support a PTO refund claim. Purchase invoices must show all the following:

• the name and address of the seller
• the selling price per litre
• the amount of tax charged
• the quantity of product purchased
• the date of the sale

You must provide all the following additional records with your refund claims to demonstrate fuel disbursements:

• a monthly summary of all fuel issues covering the entire claim period
• entries broken down by each licensed vehicle included in the claim
• based on verifiable information that may include inventory reconciliation reports from bulk storage facilities, daily disbursement logs, receipts from retail fuel outlets, and issue tickets from card lock systems

You must provide invoices marked as paid or other proof of payment such as copies of cancelled cheques or a statement of account.

Retention period for records – all claim periods

Keep all records to support your refund claim for 7 years after you apply. If you are selected for an audit, a ministry auditor will verify your claim by checking this information.

Additionally, you may be asked to provide proof of your vehicle(s) registration, equipment ownership or lease arrangements, and PTO activity.