Have you been selling take home teeth whitening kits and toothbrushes to your patients? For purposes of the Ontario Retail Sales Tax (“PST”), products such as the take home teeth whitening kits and toothbrushes are considered taxable goods? That means these products are subject to the PST.
What is PST?
PST is a consumption tax. This means that you should be charging your patients PST of 8% on sales of toothbrushes and take home teeth whitening kits.
What is a Vendor’s Permit?
A vendor’s permit is required to charge, collect, and remit PST on the taxable sales of toothbrushes and take home teeth whitening kits. You (whether a dentist or a hygiene corporation) must obtain a vendor’s permit even if your sales are small i.e. there is no minimum sales amount. The fine for failing to obtain a vendor’s permit is $100 or more for each day that a person operates without a permit.
What is a Purchase Exemption Certificate (“PEC”)?
A PEC is used to claim an exemption from PST. As a vendor, you can claim an exemption from PST (i.e. you will not be charged PST) for taxable goods that you purchase and intend to resell. To claim an exemption, you must give your supplier a properly completed purchase exemption certificate.
When you sell both taxable and non-taxable goods and/or services to your patients, you must separate the charges and charge PST on the taxable goods. Otherwise, the whole amount (including non taxable item) is taxable.
Even if you paid PST on all your purchases and you did not make a “profit” on the sales to your patients, you still need to collect PST on your taxable sales. However, you could either recover the PST you paid, from the suppliers or the Ministry of Finance.
What if you have not been charging PST to your patients on the sale of those whitening products and toothbrushes and you want to do it right from the start? Anyone who voluntarily discloses past taxes to the Ministry of Finance will be allowed to settle any related debt by making full payment including interest. You will not be assessed penalties or prosecuted if the disclosure meets certain conditions.