Question re PST exemptions

[westernstargifts]

I get lots of emails from buyers who want to buy wholesale but this is the first time I have had anyone ask for a PST exemption on her purchases. The buyer claims to be a retailer and she said she would give me her permit number but how would I know if it was legit?

It also seems that the majority of wholesale requests are from people with 0 or low feedback (6 in this case).

How does everyone else handle these kinds of requests and do you have any suggestions re the PST exemption? Thanks.

Judy

[pierrelebel]

Where is the buyer located?

Since you are in Ontario, you need to charge 8% Ontario Retail Sales Tax unless the Ontario buyer provides you with a signed Exemption certificate.

You then do not include that sale in your total of taxable sales within Ontario when filing your PST return.

If the buyer is from outside Ontario, no PST should be charged in any case at this time (things will change with HST starting July 1st).

For more information, please take a look at this http://www.rev.gov.on.ca/en/guides/rst/901.html and this http://www.rev.gov.on.ca/en/guides/rst/pdf/204.pdf

[fatdane]

After July 1 we won't have to worry about PST exemption certificates in Ontario. We will have to collect 13% HST and there are no exemptions, unless sales are to a foreign diplomat or in some cases to native customers on reserves.

[westernstargifts]

Where is the buyer located?

Since you are in Ontario, you need to charge 8% Ontario Retail Sales Tax unless the Ontario buyer provides you with a signed Exemption certificate.

You then do not include that sale in your total of taxable sales within Ontario when filing your PST return.

If the buyer is from outside Ontario, no PST should be charged in any case at this time (things will change with HST starting July 1st).

For more information, please take a look at this http://www.rev.gov.on.ca/en/guides/rst/901.html and this http://www.rev.gov.on.ca/en/guides/rst/pdf/204.pdf

The buyer is from Ontario. I do charge RST to Ontario residents but I didn't know about the Exemption certificate. Thanks for the information and for the links.

After July 1 we won't have to worry about PST exemption certificates in Ontario. We will have to collect 13% HST and there are no exemptions, unless sales are to a foreign diplomat or in some cases to native customers on reserves.

The change to HST will be a whole new ballgame.:-(

[recped]

but how would I know if it was legit?

You don't need to know! Have them complete the exemption form, that is the limit of your responsibility.

[westernstargifts]

but how would I know if it was legit?

You don't need to know! Have them complete the exemption form, that is the limit of your responsibility.

Understood, but that question was meant for the RST # only before I knew about the exemption form.

Thanks for the info! 🙂

[pierrelebel]

"and there are no exemptions"

It would be too easy if there were no exemption.

Unfortunately, we deal with politicians making laws and regulations and they find it easier to create exemptions to get some votes.

So, as of July 1st, books sold in Ontario will continue to be exempt of the PST portion of the HST and will only be taxed at the 5% GST rate (as are books currently sold to NS, NL and NB for example).

There are other exemptions.... 😞

[fatdane]

From chatting with other small business owners if one is "lucky" enough to get audited by the Provincial auditors one of the first areas they look at is the exemption certificates. If one had the form properly filled out by the purchaser and on file there is no problem, but the next visit the auditor may make is to the business using the exemption certificate to see if the business is actually buying for resale.