Categories of Ontario Retail Sales Tax Assessments
There are good assessments (being nil assessments) and bad assessments (you own money to the Ministry). This blog post is going to list the most common types of Ontario retail sales tax (ORST) assessments. It is not a complete list of every type, but I will hit the highlights:
1. Assessment of a vendor who has collected ORST and failed to remit the ORST;
2. Assessment of a vendor a penalty for failure to collect ORST from a purchaser as required (including innocent mistakes);
3. Assessment of a purchaser who did not pay ORST to a vendor as required (even when the vendor did not ask for the ORST or honestly thought the sale was exempt);
4. Assessment of a director for the ORST liability of the corporation;
5. Assessment of a person who imports taxable goods into Ontario;
6. Assessment of a person who hires a non-resident contractor (who has not coordinated with Ontario) who builds real property in Ontario and imports building materials;
7. Assessment of a person who over claimed a rebate or refund;
8. Assessment of a buyer of a business to which the bulk sales tax applies in circumstances where the vendor owes Ontario ORST on past activities and the buyer did not get a clearance certificate; and
9. Assessment of an assignee, liquidator, administrator, receiver, receiver-manager, secured or unsecured creditor, agent of the creditor, trustee or other like persons who distribute property or proceeds from the sale without obtaining a clearance certificate from the province and there are outstanding ORST liabilities.
Another categorization of assessments that you should be aware of are:
A) interim assessment - meaning that the auditor has guessed the amount and not finished his/her work before issuing an assessment;
B) audit summary: this is not an assessment;
C) final assessment: this is an assessment if it is in the form of a notice of assessment; and
D) revised assessment: if an auditor issues an assessment and subsequently revises the assessment, the new assessment generally replaces the previous assessment (if it relates to the same transactions) and restarts the limitation period for filing a notice of objection.
Cyndee Todgham Cherniak is counsel to and in affiliation with the International Trade Law and the Tax Law (Commodity Tax
