News and Insights

Ontario Retail Sales Tax Information Notice, “Ontario Tire Stewardship Fees”

Tax Development Aug 18, 2009

Ontario has issued this notice to explain how retail sales tax applies to environmental fees passed on to consumers under the Used Tires Program (“UTP”). As of September 1, 2009, a tire stewardship fee will be imposed by Ontario Tire Stewardship (“OTS”) on industry stewards (brand owners and first imports) for every tire they supply into the Ontario market.

Ontario Retails Sales Tax does not apply to the fee payable to the OTS as the charge by the organization is not in respect of taxable goods or services. However, if an industry steward recovers the cost of the stewardship fee by passing it on to retailers, the fee forms part of the fair value of the products sold. In turn, if retailers choose to recover this fee in the form of higher prices or a separate charge on a customer’s invoice, the cost forms part of the fair value of the taxable product and/or service and is subject to retail sales tax.

ON Notice Tire Stewardship