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O. Reg. 449/05: DEFINITIONS, EXEMPTIONS AND REBATES

filed July 28, 2005 under Retail Sales Tax Act, R.S.O. 1990, c. R.31

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ontario regulation 449/05

made under the

Retail sales tax Act

Made: June 14, 2005
Filed: July 28 2005
Printed in The Ontario Gazette: August 13, 2005

Amending Reg. 1012 of R.R.O. 1990

(Definitions, Exemptions and Rebates)

1. Section 6 of Regulation 1012 of the Revised Regulations of Ontario, 1990 is revoked and the following substituted:

6. (1) In this section,

“blanket purchase exemption certificate” means a purchase exemption certificate provided by a person to a vendor that applies to one or more sales to the person by the vendor or to one or more premium payments to the vendor until the person revokes the certificate or the Minister cancels the certificate;

“single purchase exemption certificate” means a purchase exemption certificate provided by a person to a vendor that applies to only one sale, contract of insurance or benefits plan.

(2) In each of the following circumstances, a person may provide a valid purchase exemption certificate to a vendor instead of paying to the vendor the amount of tax that would otherwise be levied and collected by the vendor under the Act:

1. On a sale of tangible personal property to the person if,

i. the person alleges he or she is exempt from tax under the Act, or

ii. the person alleges he or she is purchasing the property for the purposes of resale and, if the person is not resident in Ontario, he or she has a vendor permit under the Act and provides the number to the vendor.

2. On a sale to the person of a taxable service described in clause (a), (c), (c.1), (d) or (d.1) of the definition of “taxable service” in subsection 1 (1) of the Act if,

i. the person alleges that he or she is purchasing the service for the purposes of resale and, if the person is not resident in Ontario, he or she has a vendor permit under the Act and provides the number to the vendor, or

ii. the taxable service is supplied in respect of taxable tangible personal property with respect to which the person alleges he or she is exempt from tax under the Act.

3. On a payment by the person of a premium under a contract of insurance if,

i. the person is not required to pay tax under the Act in respect of premiums under the contract of insurance because the conditions under clause 2.1 (8) (b), (d), (e), (f), (j) or (k) of the Act are satisfied, or

ii. the contract of insurance has been prescribed for the purposes of clause 2.1 (8) (m) of the Act.

4. On a payment by the person of a premium or part of a premium under a benefits plan if the person is the planholder of the plan and is not required to pay tax under the Act in respect of the premium or the part of the premium because the conditions in subsection 2.1 (18) of the Act are satisfied.

5. On a sale to the person of tangible personal property or a taxable service if the person is a registrant and is not liable to pay tax under the Act in respect of the sale by reason of subsection 3 (5) of the Act.

6. On a sale in respect of railway rolling stock or on the payment of a premium under a contract of insurance in respect of railway rolling stock if the value on which the tax is payable under the Act is determined under section 15 and the person pays tax directly to the Minister.

(3) Instead of providing a purchase exemption certificate to a vendor under subsection (2), a person who satisfies one of the following paragraphs may present to the vendor the identity card described in that paragraph:

1. An identity card issued by an accredited farm organization under the Farm Registration and Farm Organizations Funding Act, 1993 on the sale of tangible personal property or a taxable service or in respect of a contract of insurance on agricultural property if the person is engaged in the business of farming and is exempt from tax by reason of,

i. paragraph 13, 14 or 19 of subsection 7 (1) of the Act, in respect of the tangible personal property,

ii. subparagraph 2 ii or vi of subsection 7 (1) of the Act, in respect of the taxable service, or

iii. clause 2.1 (8) (b) of the Act, in respect of the contract of insurance.

2. An identity card issued by the Office of Protocol, Department of Foreign Affairs and International Trade (Canada), if the person is exempt from tax under subsection 7 (5) of the Act.

3. A Certificate of Indian Status identity card issued under the Indian Act (Canada) by the Government of Canada, if the person is exempt from tax in respect of the sale by reason of paragraph 59 of subsection 7 (1).

4. An identity card issued by the Canadian National Institute for the Blind on the sale of audio books, if the person is exempt from tax in respect of the sale by reason of paragraph 66 of subsection 7 (1) of the Act.

(4) A purchase exemption certificate provided by a person under subsection (2) may be either a single purchase exemption certificate or blanket purchase exemption certificate and is valid only if it includes,

(a) the name of the person or name under which the person transacts business;

(b) the address of the person or the address at which the person carries on business;

(c) the name of the person who is authorized to acquire the tangible personal property or taxable service or enter into the contract of insurance or benefits plan;

(d) the reason for claiming the exemption from payment of tax;

(e) the person’s vendor permit number under the Act if the person is a vendor under the Act;

(f) the carrier account number issued by the Ministry of Transportation if the person is a registrant; and

(g) the date the person provided the purchase exemption certificate.

(5) A person who provides a valid blanket purchase exemption certificate to a vendor is not required to supply any additional purchase exemption certificates on individual sales or premium payments until the blanket purchase exemption certificate is revoked or cancelled.

(6) Every person who provides a blanket purchase exemption certificate shall promptly revoke the certificate if any information required to be included in the certificate was omitted or is not currently correct, but the person may provide a replacement certificate with the correct information, if the person is entitled under subsection (2) to use a valid blanket purchase exemption certificate.

(7) If a person provides a purchase order to a vendor and intends to rely on a blanket purchase exemption certificate or on an identity card described in paragraph 1, 2, 3 or 4 of subsection (3), the person shall ensure that the purchase order contains,

(a) a notation that the purchaser is using a valid blanket purchase exemption certificate already provided to the vendor or an identity card to be presented to the vendor;

(b) the person’s vendor permit number if the person is registered under the Act as a vendor;

(c) the number or identifier from the identity card, if the person is entitled to present an identity card under subsection (3) on the sale; and

(d) the carrier account number issued by the Ministry of Transportation if the person is a registrant.

(8) A person, other than a vendor who holds a “G” permit under subsection 4 (1) of Regulation 1013 of the Revised Regulations of Ontario, 1990 (General) made under the Act, shall not give a vendor a purchase exemption certificate but shall pay the tax under the Act to the vendor,

(a) on the price charged for tangible personal property purchased by the person for consumption or use in the course of carrying on a business;

(b) on the price charged for a taxable service purchased by the person in the course of carrying on a business; and

(c) on the payment of a premium charged for a contract of insurance or a benefits plan if the person entered into the contract of insurance or became a planholder of the benefits plan in the course of carrying on a business.

(9) Every vendor shall maintain a record of the name and the number or other identifier on each identity card presented to the vendor.

(10) A vendor shall not apply a valid single purchase exemption certificate to more than one sale, contract of insurance or benefits plan.

(11) The Minister may cancel a blanket purchase exemption certificate if the person who provided it is not entitled to use it.

Made by:

gregory sorbara

Minister of Finance

Date made: June 14, 2005.