RETAIL SALES TAX MEASURES (RST)

Exemption For Destination Marketing Fees

A temporary exemption from the 5% RST accommodations tax will apply to Destination Marketing Fees billed after May 18, 2004 and before May 19, 2005.

Rebate For Residential Renewable Energy Systems

The renewable energy RST rebate will be extended to include wind energy systems, micro-hydroelectric systems and geothermal heating cooling systems for residential premises. The rebate is available for purchases made after March 27, 2003 and before November 26, 2007.

Transfer of Assets Between Related Corporations and Partnerships

In the fall of this year, the Ministry of Finance will release draft regulations to modernize the rules for the RST exempt transfer of assets between related corporations as well as between partnerships and their principals. This measure will be effective on the release date of the draft regulations.

Elimination of the RST Rebate for Vehicles Used to Transport Persons with Permanent Physical Disabilities

Effective for purchases on or after May 19, 2004, the rebate of RST paid on motor vehicles to transport persons with physical disabilities is eliminated. Rebates remain available on purchases and leases of qualifying vehicles entered into before May 19, 2004 provided delivery takes place on or before July 31, 2004.

The RST exemption on related equipment (e.g., disabled hand controls, wheelchair lifts, ramps and tie-downs) installed in vehicles will remain in place.

To compensate for the loss of this rebate, funding for the Home and Vehicle Modification Program administered by the Ministry of Community Services will be increased by $10 million per year. This additional funding exceeds the $8 million in savings the current rebate is estimated to provide.

Purchase Exemption Certificates (PECs)

The government proposes changes to simplify the use of RST PECs. These changes are designed to reduce red tape and compliance costs for vendors and taxpayers when claiming an exemption from RST on purchases. PECs will no longer require a signature, a list of exempt items or an expiry date. As well, farmers would be allowed to use farm association identification cards in lieu of PECs.

Tobacco Taxes

Effective May 19, 2004 taxes on cigarettes will increase by 11.1 cents per cigarette. Similar tax increases will be imposed on other tobacco products.

Taxes on Spirits, Wine and Beer

The volume levy applied to spirits, wine and coolers is increased for purchases made on or after June 21, 2004. This increase will be 25 cents per litre bottle of spirits, 12 cents per litre bottle of wine and 9 cents per litre of coolers. The brewers' basic fee will increase by 4.5 cents per litre of beer. Similar fee increases will be imposed on microbreweries and brew pubs.