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Tax refund for power takeoff equipment

Type
TAX CREDITS
Application Difficulty
MEDIUM
Time To Complete4 weeksProgram Budgetno cap
See If You Qualify

Highlights

This program is designed for businesses like yours that use auxiliary equipment powered by the same fuel tank as your vehicle. If you paid tax on fuel used for this equipment, you could be eligible for a refund. This means you can get back some of the money you've already spent on fuel, which can help reduce your operating costs.

Why Apply?

  • Refund on Fuel Tax: Get a refund on the tax paid for fuel used in your auxiliary equipment.
  • Easy Qualification: If your equipment meets the criteria, qualifying is straightforward.
  • Financial Relief: This refund can provide significant financial relief, allowing you to reinvest in your business.

What's in it for You?

  • Pre-determined Allowances: Refunds are calculated using pre-determined percentages based on your equipment type, ensuring you get a fair amount back.
  • Direct Deposit Option: Receive your refund faster with direct deposit.
  • No Need for Extensive Documentation: For refunds under $500, you don't need to send supporting records with your application.

Applying for this program is a smart move to reclaim some of your expenses and improve your cash flow.

Financing Details

Type of Financing: Refund

Eligible Expenses:

  • Tax paid on clear fuel, gasoline, or propane used for Power Take Off (PTO) operations.
  • The motor vehicle must be licensed under the Highway Traffic Act.
  • Use of the auxiliary equipment must occur in Ontario.
  • The auxiliary equipment must be powered using the same fuel tank as the motor vehicle.
  • The power from the auxiliary equipment must not be used to propel the motor vehicle.
  • The motor vehicle must not be principally used to transport passengers.
  • The auxiliary equipment must not be used for personal use, pleasure, or recreation.
  • Tax must have been paid to Ontario for the fuel used during the PTO operation.

Ineligible Uses:

  • Funds cannot be used for auxiliary equipment that is used for personal use, pleasure, or recreation.
  • The motor vehicle must not be used principally to transport passengers.

Fees:

  • No specific fees are associated with applying for this refund.
  • Accurate and verifiable records of fuel purchases must be maintained and provided if requested during an audit.
  • Supporting documents must be kept for seven years.

Qualifications

  • Motor vehicle must be licensed under the Highway Traffic Act.
  • Use of auxiliary equipment must occur in Ontario.
  • Auxiliary equipment must be powered using the same fuel tank that powers the motor vehicle.
  • Power from the auxiliary equipment must not be used to propel the motor vehicle.
  • Motor vehicle must not be principally used to transport passengers.
  • Auxiliary equipment must not be used for personal use, pleasure, or recreation.
  • Tax must have been paid to Ontario for the fuel used during the PTO operation.
  • Refund must be filed and received by the Ministry of Finance within four years from the date the tax was paid.

  • Disqualifications:

    • Motor vehicles used principally to transport passengers.
    • Auxiliary equipment used for personal use, pleasure, or recreation.

Description

If your business uses auxiliary equipment powered by fuel from your vehicle's tank, you could get a refund on the fuel tax you paid. This refund applies to equipment like cement mixers, aerial buckets, refrigeration units, power vacuums, and more.

Here's what you need to know:

  • Refund Amount: The refund is calculated based on a percentage of the total fuel used by your vehicle. Different types of equipment have different refund rates. For example, vacuum trucks over 600hp can get a 40% refund, while utility vehicles like aerial buckets can get a 10% refund.

  • Conditions: The vehicle must be licensed under the Highway Traffic Act and the auxiliary equipment must be used in Ontario. The fuel must come from the same tank that powers the vehicle, and the equipment should not be used for personal or recreational purposes.

  • Time Frame: You have up to four years from the date the tax was paid to file for a refund.

This program can save your business money on fuel costs, making it a valuable opportunity to reduce expenses.

Program Steps

  1. Download the Application Form: Obtain the application form relevant to your claim period. For example, use the "Auxiliary Equipment Refund – PTO Activity on or after July 1, 2017" form.

  2. Prepare the Necessary Documentation: Gather the following documents to support your application:

    • Purchase invoices showing:
      • Name and address of the seller
      • Selling price per litre
      • Amount of tax charged
      • Quantity of product purchased
      • Date of sale
    • Monthly summary of all fuel issues covering the entire claim period
    • Entries broken down by each licensed vehicle included in the claim
    • Verifiable information such as inventory reconciliation reports, daily disbursement logs, receipts from retail fuel outlets, and issue tickets from card lock systems
    • Proof of payment such as copies of cancelled cheques or a statement of account
    • Proof of vehicle(s) registration, equipment ownership or lease arrangements, and PTO activity
  3. Complete the Application Form: Fill out the application form accurately, ensuring all required fields are completed.

  4. Mail the Application Package: Send your completed application form and all supporting documents to:

    Ministry of Finance Motor Fuels and Tobacco Tax 33 King Street West PO Box 625 Oshawa ON L1H 8E9

  5. Keep a Copy for Your Records: Retain a copy of the completed application form and all supporting documents for your records. These must be kept for seven years in case of a ministry audit.

  6. Consider Direct Deposit: To receive your refund faster, download and complete the "Direct Deposit Request / Direct Deposit Authorization" form and include it with your application.

  7. Wait for Processing: The Ministry of Finance will review your application and supporting documents. If everything is in order, they will process your refund.

  8. Respond to Any Follow-Up Requests: If the Ministry of Finance requires additional information or documentation, respond promptly to ensure timely processing of your refund.

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