Ontario truckers to save more than $15 million
QUEEN’S PARK, Ont. — Ontario Finance Minister Jim Flaherty, has given the green light to new sales tax laws for all Ontario fleets and O/Os inked to the International Registration Plan (IRP).
Previously referred to in Truck News as the Multi Jurisdictional Vehicle Tax, the plan will see the eight per cent Provincial Sales Tax (PST) paid on new equipment decline by 20 per cent to 40 per cent. The Ontario Trucking Association (OTA) estimates this will result in a savings of more than $15 million.
Ontario will abandon charging PST on trucks, trailers, and repairs at time of purchase, in favor of a new Annual Pro-Rated (recurring) Sales Tax for vehicles registered under the IRP.
Under the new regime, an annual levy will be applied to all IRP registered power units. Trailers and repairs made on IRP-registered tractors will be exempt from sales tax. In addition, all out of province trucks operating in Ontario will also have to pay the Annual Pro-Rate (Recurring) Sales Tax based on their Ontario IRP miles.
Ontario’s plans to implement an Annual Pro-Rated (Recurring) Sales Tax were first made known publicly in this past spring’s provincial budget.
Since then lobbying efforts by the OTA and other groups, including the National Truckers Association, succeeded in securing an 11 per cent reduction in the proposed tax rate for the first three years, reflecting the amount of additional dollars to be raised from U.S. carriers.
This revenue-neutral charge for the province was reported in the September issue of Truck News. Since then, however, the OTA has managed to get the proposed credit system changed because it would have meant higher taxes on existing equipment. Consultations over the past several weeks have led to the development of a fairer credit system, in the eyes of the fleet group, for all vehicles regardless of age.
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