Kevin asked:

I am in the process of opening an electrical contracting business in Ontario. As I am filling out all my papers for the Electrical Safety Authority and my account for the supplier, one is asking for an RST number or a vendor permit number, which I was told is PST, yet the supplier is asking for a PST exempt number. Do I need a GST number as well? This is a sole proprietorship and I am the only employee/owner/operator.

John R Mott answered:

If you can afford it, my best advice would be to go on vacation for the next two months. That's because the sales tax regime is about to change in Ontario. Commencing July 1, the Ontario sales tax is harmonizing with the federal GST.

So, beginning with your last question, yes, you do need a GST number. Soon to be called an HST number.

Secondly, RST and PST are the same thing. The vendor permit number and the sales tax exemption number are also the same thing. If you need to understand the current sales tax system in Ontario, then I suggest that you start here: http://www.rev.gov.on.ca/en/guides/rst/901.html.

To understand the harmonized tax system, you should start here: http://www.rev.gov.on.ca/en/notices/hst/.

Notices 1 and 3 are of particular relevance to you.

The federal government's CRA website also has an orientation page: http://www.cra-arc.gc.ca/gncy/hrmnztn/on/menu-eng.html.

If you find this overwhelming, it might make sense to look for an accountant. A good accountant can help also you and your business in many more useful ways.

About the author

John Mott is a chartered accountant and tax specialist with a private practice in mid-town Toronto. He provides tax, accounting and advisory services to individuals and small businesses. He may be visited online at: johnmott.com.

 
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