vendor + taxing info

ust a quick note hopefully answer any questions you might have regarding operating your business…

Who requires a Vendor Permit?

You must obtain an RST Vendor Permit if:

  • you regularly sell taxable goods;
  • you regularly provide taxable services;
  • you sell taxable goods or services at flea markets, fairs or exhibitions;

You must register for a Vendor Permit even if your sales are small – there is no minimum.

You must keep a copy of your Vendor Permit at each business location and let anyone see it on request.

How do I get a Vendor Permit?

It comes with registering yoru business (approx $60. One time fee)

You must report any changes to your business name; telephone number; location; mailing address/business address at the Ontario Ministry of Finance under online services, or on the back of the RST return form.

What is taxable?

RST applies to all purchases/sales of tangible personal property, unless there is a specific exemption. Tangible personal property is anything that can be seen, weighed, measured, felt or touched; that is, anything that we can perceive with our senses. It also includes computer programs, natural gas and manufactured gas.

i. Tax-exempt Goods
Examples of the most common goods that are not taxable to anyone include:

  • food products (except for candies, confections, snack foods and soft drinks);
  • children’s clothing (including diapers);
  • footwear costing $30 or less;
  • feminine hygiene products;
  • books, newspapers, bulletins;

What is the RST rate and how is it calculated?

The general RST rate in Ontario is 8%.

You must calculate RST separately on every transaction. If you sell several taxable goods together, this is considered one transaction. You calculate RST on the total amount charged to your customer.

When you provide both taxable and non-taxable goods and/or services together, you must separate the charges and charge RST on the taxable goods and/or services.

What records should I keep?

You must keep all your record of RST charge for seven years. In fact after that time if you wish to destroy any records you must obtain permission from the government.

records you should keep:

  • financial statements;
  • contracts;
  • sales and purchase invoices;
  • annual inventory records;
  • bank statements;
  • cancelled cheques
  • Purchase Exemption Certificates provided by your customers
  • out-of-province shipping or mailing receipts.

How is RST Reported and Remitted?

Once you have a Vendor Permit, you will receive RST “return” forms (in the mail–every 6 months). You must complete and file all returns, even if you have no sales or RST to report during the return period. You can file your returns and make your payments:

  • at any financial institution in Ontario where you have an account
  • by mail or hand delivery to any Ministry of Revenue tax office
  • electronically, using a financial institution’s online government tax payment and filing service.

i hope this helps and doesnt break anyones heart too much. It really is a simple step because they send you the forms each month. the hardest part will be to keep track of all your sales, especially if you are selling both children’s clothing (non-taxable) and adult anything (taxable)

(…woah i just realized that the info was entered a few times, and i needed to edit it… silly silly wordpress!!)


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