This is to advise OTS-registered Processors and RPMs of coming changes to your Ontario Tire Stewardship (OTS) Incentive Claims and resulting payments. These changes will affect all Transportation, Processing and Manufacturing Incentive (TI, PI and MI) Claims submitted as of October 16th, 2018 and will result in the calculation and payment of 13% Ontario Harmonized Sales Tax (HST).
In 2013, OTS received a Ruling from the Canada Revenue Agency (CRA) regarding the calculation of HST on various incentives paid under the Used Tires Program. In accordance with that Ruling, OTS continued to apply HST to payments to Collectors and Haulers, but not on subsidies provided to Processors and Manufacturers.
On October 16th, 2018, the CRA issued a new Ruling (the Ruling can be found here) to OTS, following the judgment by the Tax Court of Canada in the case involving Stewardship Ontario, an Ontario Industry Funded Organization (IFO). The Ruling in that case found that fees charged by an IFO should be considered taxable. In this most recent Ruling, the CRA directs OTS to commence the payment of HST on incentives offered to Participants under the Program. This Ruling applies to all Claims submitted to OTS as of the Ruling date, and is not retroactive.
As of October 16th2018, all Claims submitted through the Treadmarks system will be subject to HST, regardless of the Claim Period. To view the HST calculation related to a specific Claim, please refer to the Payments and Adjustments panel on your Claim Summary page.