UCDA warns Ontario sales tax gone … almost
If you think the Ontario sales tax will disappear on Canada’s birthday, forget it. The ORST applies to any item not covered by the GST, insurance, for example. Why? Because insurance premiums are GST exempt.
“Many dealers offer optional life, health or disability insurance …, Like most insurance, these premiums are not subject to GST, but are subject to eight percent ORST,” the UCDA warned its members in the recent issue of Front Line.
“Since HST applies only to things that are subject to GST, there will be no HST on these insurance products after June 30.”
But this doesn’t mean insurance products will be tax-free. The ORST still applies. So dealers will still have to keep on collecting and remitting the eight percent.
The association says extended warranties, rust proofing, gap protection, etching and other like products are not considered insurance and the HST applies.
HST will be calculated on the sale price of the vehicle plus the cost of these products,” the association says.
The UCDA is advising its members to contact the Ministry of Revenue to open a new ORST account.