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Click here to read the Notice of
Fee Change sent to dealers.
Updated: September 2009
- What type of vehicle transactions are subject to the fee?
- What transactions are exempt from the transaction fee?
- How does the transaction fee work for leases?
- How and when do I remit payment? Will OMVIC send me an invoice?
- Can I combine the renewal fee and transaction fee into one payment?
- When did the transaction fee take effect?
- If I pass through the transaction fee to customers, where should it be placed on a bill of sale? Is it a taxable fee?
- What happens if a customer refuses to pay the $5 fee?
- How can OMVIC verify the number of transactions that occur at my dealership?
- What happens if the number of vehicles reported by a dealer does not match the payment submitted?
- Has OMVIC’s inspection process changed since the transaction fee program was implemented?
- How does the transaction fee affect consignment sales?
- Who can I contact if I still have questions about the transaction fee?
1) What type of vehicle
transactions are subject to the
fee?
Under the transaction fee
program, dealers are
required to remit $5 for every
sale, lease, fleet or “as is”
transaction on a "per vehicle"
basis as a component of their
registration renewal fee except
transactions deemed wholesale.
For the purpose of the
transaction fee, a vehicle is
any motorized vehicle other
than:
- a non-motorized trailer
- a vehicle used primarily
for farming
- a specialized
construction machine
- a snowmobile
- a vehicle which is not
built for use on the road
(e.g. ATVs, watercraft, dirt
bikes etc. which are not to
be used on roads or
highways)
Examples of motor vehicles
subject to the transaction fee
include cars, vans, trucks,
SUVs, motorcycles etc.
2) What transactions are
exempt from the transaction fee?
The following transactions
are exempt:
- selling or leasing a vehicle
directly to another registered
dealer, who will then be
responsible to remit the
transaction fee when it sells or leases
the vehicle to a non-registrant
- selling a vehicle to a bona fide
lessee during or at the end of
their lease term (note: the
transaction fee is applicable at
the inception of the lease).
Also, if a lessee chooses to
re-lease the same vehicle as
a way of financing the lease
buy-out, this second lease
would not be subject to the
transaction fee.
3) How does the transaction
fee work for leases?
New car dealers are
required to remit the
transaction fee for leases on
behalf of the lessors with whom
their manufacturers have
arrangements (sometimes referred
to as “captive lessors”). This
applies regardless of whether
the vehicle being leased by the
dealer is a new or used car. New car dealers may choose to
pass on the transaction fee to
consumers through their retail
bill of sale. (See #7 re:
tax implications.) Independent lessors
are required to
remit their transaction fee
payments directly to OMVIC.
4) How and when do I remit
payment? Will OMVIC send me an
invoice?
OMVIC does not issue
invoices. Dealers are expected
to self-report and remit payment
with their renewal application. OMVIC
will be able to monitor the
accuracy of remittances based on
information provided by the
Ministry of Transportation and
through inspections. The
renewal cycle for dealers
has changed from two years to one
year to facilitate timely
collection of the renewal fee
and transaction fee payments. An
officer, all partners or the
sole proprietor of the dealer
must sign the renewal form
attesting to the accuracy of the
remittance.
5) Can I combine the renewal
fee and transaction fee into one
payment?
Yes, at the time of renewal
you will make one payment that
includes your renewal and
transaction fees. The
transaction fee is a component
of the renewal fee. Renewal forms
have been modified for this
purpose.
GST and HST must be collected
on the transaction fee if the
fee is passed on to the
customer; however, they should
be remitted directly to
appropriate tax authorities, NOT
to OMVIC.
If the transaction fee is not
passed on to the customer, no
tax is payable.
6) When did the transaction
fee take effect?
On an annual basis, dealers
are required to remit $5 for
applicable transactions as of
February 1, 2008. The applicable
date for determining whether a
particular transaction is
subject to the transaction fee
is the date the agreement with
the customer was entered into
(i.e. not the date the vehicle
is delivered or the date
registration is transferred to
the customer).
7) If I pass through the
transaction fee to customers,
where should it be placed on a
bill of sale? Is it a taxable
fee?
If you wish, you may record
this fee on your bill of sale or
lease. This fee cannot
exceed the $5 OMVIC is
collecting. If you are
referring to an OMVIC fee
(verbally or in writing) you
must also indicate the amount is
$5. For example, if you
incorporate the OMVIC fee in the
administration fee you currently
charge and you refer to it on
the bill of sale, you must also
indicate OMVIC's portion of the
administration fee is $5. If you do list it on the bill of
sale or lease, you will
need to collect and remit both
HST and GST directly to tax
authorities. You do not need to
remit the HST or GST to OMVIC.
8) What happens if a
customer refuses to pay the $5
fee?
While dealers must remit a $5
transaction fee per vehicle,
passing the fee on to customers
is optional, not mandatory.
OMVIC does not anticipate
customers will refuse to pay the
$5. The Automobile Protection
Association, the Consumers
Council of Canada and Car Help
Canada are all consumer
organizations representing
consumer interests. All three
organizations are supportive of
the transaction fee even if a
dealer chooses to pass the cost
on to a consumer. Each
organization is interested in
maximizing consumer protection
through regulatory and public
education initiatives. So that
your customers understand the
benefits of a regulated
industry, we encourage you to
direct them to our website,
www.omvic.on.ca.
If a consumer
refuses to pay the
transaction fee, the dealer is
still responsible for remitting
the $5 fee to OMVIC.
9) How can OMVIC verify
the number of transactions that
occur at my dealership?
OMVIC will be able to verify
transactions through inspections
and with the aid of Ministry of
Transportation reports.
10) What happens if the
number of vehicles reported by a
dealer does not match the
payment submitted?
OMVIC recognizes that errors
in reporting can happen and
minor variations are to be
expected; however, if there is
evidence of deliberate failure
to report accurately,
appropriate administrative
action will be considered.
11) Has OMVIC’s inspection
process changed since the
transaction fee program was
implemented?
OMVIC inspectors may verify
the payments and submissions you
make to OMVIC but, for the most
part, are not expecting
current inspection methods to
change significantly.
12) How does the transaction
fee affect consignment sales?
If you sell a vehicle to
someone who is not a registered
dealer – whether by consignment or
otherwise – you need to remit
the transaction fee on the sale. If you consign a vehicle to
another registered dealer who
then sells it to somebody who is
not registered (e.g. a consumer)
then the dealer who sold to the
non-registrant needs to
remit the transaction fee. You
do not need to remit a
transaction fee on the
consignment to another
registered dealer.
13) Who can I contact if I
still have questions about the
transaction fee?
OMVIC's toll free number is
1-800-943-6002 and staff can be
reached during normal business
hours.
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