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TORONTO, Ontario — The Used Car Dealers Association of Ontario recently released a Dealer Alert explaining how the new Harmonized Sales Tax laws impact sales and leases to Status Indians.

UCDA stressed to dealers that for a two-month period that began July 1, there will be a 13-percent HST applied to sales and leases to Status Indians should the customer take delivery off the reserve.

This 13-percent HST is also applicable on repair work for Status Indians who get work done off the reserve. 

Status Indian customers can recoup some of that money, however.

"The Status Indian will be able to apply to the Ontario Ministry of Revenue for a refund of the 8-percent provincial portion of the HST paid," officials noted.

Also, the full 13-percent HST is not applicable on vehicles and parts delivered to Status Indians on a reserve.

Beginning Sept. 1, the aforementioned rules change a bit.

The 8-percent provincial portion of the HST will not apply at the point of sale on sales, leases and repair work done for Status Indians off reserve. As such, dealers need to charge 5-percent HST to Status Indians should the customer take delivery off the reserve.

Meanwhile, "Vehicles and parts delivered to a Status Indian purchaser on reserve will be fully exempt from the 13-percent HST," officials stated.

Continuing on, UCDA stressed the important of proper identification. Dealers need to confirm that customers have a Certificate of Indian Status Card from the federal government with their name on it to be eligible to be exemption from any taxes.

UCDA recommends that dealers note the registry number or band name of the Status Indian customer. Dealers also need to photocopy the card for their records.

Furthermore, when it comes to delivery to the reserve, UCDA said: "To have evidence of delivery, it's a good idea to purchase something on the reserve and keep a dated receipt, showing a reserve address in the vehicle file."