If you’re like most people you usually just grab your sales receipt, quickly look at it and then put it away. Even more rarely do we look at how much we’re paying in sales tax, because we always pay taxes…right? Well that’s not always the case, certain items are exempt from sales taxes and small decisions can help you save a few dollars here and there.
As always, thanks again for reading this article and please share if you enjoy it. You can find out more about the Friendly Financial Coach, Toronto’s only non-biased Financial Literacy Coach, here.
Food Sales Tax
The way that food is taxed is an odd thing that is a two step process. The first step is whether or not the Federal Government decides if the item is taxed or not. If an item is taxed, the next step is if the Ontario government will rebate their portion of this tax.
To begin, the Canadian Government classifies basic groceries as tax-fee, this includes fresh, frozen, canned and vacuum sealed fruits and vegetables, cereal, most milk products, meats, eggs, coffee beans and more. However, it excludes prepared meals, carbonated beverages, alcohol, single servings of bottled water and more.
The next step is what products the Ontario Government decides to apply a provincial tax rebate on. As previously mentioned, all the qualifying goods must be under $4 and meet certain “restrictions”. The following is a list of goods that qualify for the Ontario provincial tax rebate and are therefore just have Federal taxes applied (5%) ;
– Food and beverages heated for consumption
– Fresh salads
– Sandwiches or similar products
– Ice cream and similar products in single servings
– Carbonated beverages if sold with another qualifying good
– Snacks like chips, nuts, popcorn and candies
– Pastries that are not pre-packaged and sold as single servings (under 6 units.)
– A complete list can be found here;
One of my weirdest discoveries is how bottled water is taxed. Single water bottles are taxed, but if you buy bottles with 600ml+ or multiple bottles then they are not taxed. Odd, right?
Sales Tax on Children’s Goods
Certain children’s goods are also exempt from provincial taxation and are only taxed at a rate of 5%. Qualifying clothing includes baby garments, and clothing up to size 16 for females and size 20 for males. Similarly, footwear qualifies if it is for babies, or has an insole up to 24.25cm. Sports wear, both clothing and shoes, only qualifies if it can also be used in non-sports environments, like running shoes. To qualify, car seats must conform to select Canada Motor Vehicle Safety Standards. Diapers also qualify under this rebate.
Sales Tax on Other Goods
- Certain feminine hygiene products are completely tax free, including tampons, sanitation napkins, sanitary belts and other similar goods.
- Books! Well, printed and audio books are exempt from provincial taxes, but digital books are not. Individual magazines are also not covered, but subscriptions are. You can read about getting free magazines from the Toronto Library here and not pay anything at all!
- Newspapers, like books, the government is about 10 years behind and only printed newspapers are provincial tax exempt. If you subscribe to any online service then your out of luck.
As always, thanks for reading this article about how sales tax works. If you have any questions you can contact me at email@example.com or at 647-289-0012. Also, don’t forget to sign up to our awesome Newsletter below!