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SPECIAL CASES
APPRAISALS
When
the real purchase price is less than the average wholesale value shown on
the UVIP as a result of excessive wear or severe damage, the vehicle may be
appraised and the tax will payable on the greater of the purchase price or
the appraised value.
Appraisals
must he obtained by the current purchaser and must he done within 60 days
of the date of sale.
Appraisals
may be obtained from the following two groups:
1.
Motor Vehicle Dealers that are licensed under the Motor Vehicle
Dealers Act and
who are registered vendors under the Retail Sales Tax Act and are primarily involved in
the business of selling cars.
2.
Recognized independent appraisers.
Note:
The appraisal form (available at the licensing
offices) must be filled out completely to be accepted. The minimum
information required is:
1.
Dealer/Appraiser Name
2.
Dealer/Appraiser Address
3.
Dealer/Appraiser Number
4.
Vehicle Description (including V.I.N.)
5.
Appraised Value
6.
Signature of person performing appraisal
B.
Please note that the final determination of the validity of the appraisal
will be made by the Ministry of Finance, Retail Sales Tax Branch. The
Ministry of Finance will review all Motor Vehicle Appraisal Records and if
any are found to be invalid, the purchasers will be assessed for tax
payable.
C.
Tax will be collected on the greater of the purchase price OR appraised
value
VEHICLES TAKEN IN LIEU OF FUNDS
When
a used motor vehicle is provided in lieu of an outstanding debt, sales tax
will be payable on the fair market value of the vehicle. This same rule
applies to used motor vehicles that are provided to employees by their
employers as a bonus or payment of wages.
ANTIQUE VEHICLES REGISTERED WITH HISTORIC PLATES
At
time of transfer, purchaser must provide a copy of the appraisal document,
or a copy of their insurance policy, showing the amount the vehicle has
been insured for. Retail Sales Tax will be payable on the greater of the
purchase price or appraisal/insured value.
VEHICLES WRITTEN-OFF BY INSURANCE COMPANIES
These
vehicles are usually sold to wreckers who are registered with the Ministry
of Finance, the Ministry of Consumer and Commercial Relations and MTO.
Therefore, the wreckers are entitled to transfer vehicles exempt of sales
tax. If the vehicles are sold to persons who are not valid Dealers/Vendors
or "C" status MTO registrants, tax must be paid on the Fair
Market Value at the time of transfer.
VEHICLES TRANSFERRED FROM SINGLE TO JOINT OR JOINT TO
SINGLE OWNERSHIP
Unless
documentation from the Ministry of Finance is presented that would provide
for exemption, tax must be paid on the Fair Market Value for the vehicle at
time of transfer.
When one of the names
shows on the old and on the new registration that person may apply for
refund of 50% of the taxes paid.
VEHICLES REBUILT FROM PART AND VEHICLES BUILT FROM
KITS
Motor
vehicles that have been rebuilt from parts are taxable at the time of
transfer on the declared value. Also, motor vehicles that are purchased as
"Kits" will have tax paid on declared value. If all applicable
retail sales tax has been paid on the parts, the declared value for tax may
be $ 0. These vehicle will be registered with the models "RBI"
(Rebuilt) or "KIT" as appropriate.
An
exemption to paying tax on the declared value would apply when a person has
more than one vehicle already registered and uses parts from them to
construct one vehicle from the parts. If the person is registering this new
vehicle as a "RBT", (Rebuilt) no tax is payable
VEHICLES TRANSFERRED
WITH OTHER PROPERTY
At
time of transfer, tax must be paid on the Fair Market Value for the
vehicle. Additional taxable tangible personal property, i.e. boat, motor,
stereo, helmet, etc., purchased along with the vehicle is subject to Retail
Sales Tax at the same time.
NOTE:
If the buyer provides an appraisal to show the vehicle has a value lower
than fair market value as a result of severe damage or excessive wear, then
tax would be payable on the greater of declared value or the appraised
value.
TRADE-INS
The
value of a motor vehicle accepted as a trade-in on the private purchase of
another motor vehicle no longer reduces the total purchase price for the
purposes of calculating sales tax. Although tax is payable on the fair
market value of the motor vehicle being purchased, it would be difficult in
most cases to determine the purchase price when part of the payment is
comprised of a trade-in. As a result, tax is payable by both parties on the
average wholesale value of each vehicle being transferred.
LUDICROUS VALUE
It
is possible that the Red Book value of a vehicle could be obviously wrong
by several thousands of dollars. i.e., 1978 Chevrolet Caprice with a value
listed of $60,800. If this situation occurs, the transfer may be completed
using the purchase price of the vehicle.
VEHICLES IMPORTED INTO ONTARIO
All
vehicles imported from other jurisdiction (State, Province or Country) are
subject to Ontario Retail Sales Tax on the Fair Market Value. If the
vehicle has paid duties and taxes to Revenue Canada, it will be taxable on
the amount taken by revenue Canada as the base price to collect GST.
Exemption:
If
the registrant is a new settler the registration will be exempted from
Ontario RST. The registrant must supply proof that he is a new comer in to
the province.
GIFTS
Gift
of used vehicles between parents and children (also step-children),
grand-children and grand-parents, between spouses or in-laws are exempted
from RST. A sworn statement (affidavit) signed by both the donor and the
recipient is required.
Gifts
between siblings are not exempted from taxes.
For
more information on gifts see the section Transfer
of Vehicles
GIFTS BETWEEN CORPORATIONS AND ITS SHAREHOLDERS
Transfer
of vehicles between corporations and its shareholders are tax exempted if
the shareholder and his/her immediate family (spouse, parents,
children) own more than 95% of the shares as confirmed by special
declaration of the Lawyer or accountant of the Corporation. The
letter must indicate that he/she has personal knowledge of the current
total issued and outstanding share capital of the corporation and stated
dollar value of all issued and outstanding shares of each class. An
affidavit is also required indicating that the transfer is done for no
consideration ( no money exchange hands), and the original bill of sale
from the dealer or proof of taxes paid by the current owner (the corporation
or the shareholder), must be presented.
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