News and Insights

Ontario Retail Sales Tax Guide 601, “Labour Charges”

Tax Development Mar 08, 2009

The province has recently updated this guide to clarify the types of services considered to be taxable for Ontario Retail Sales Tax (ORST) purposes. Any vendor that provides labour to install, assemble, dismantle, adjust, repair, or maintain tangible personal property, or install, configure, modify or upgrade a taxable computer program, is providing a taxable service.

In addition, the guide reiterates that local travel charges associated with taxable labour form part of the fair value of the services provided and are subject to ORST. Local travel charges would include expenses incurred during a normal working day, such as meals and mileage, but exclude other types of expenses such as accommodation or air fare.

The guide also specifies that repairs and alterations to adult clothing are taxable, whereas these same services performed on children’s clothing would be non-taxable as the underlying goods are unconditionally exempt from ORST.

ON Guide 601