Published: May 2001
Content last reviewed: September 2009
ISBN: 0-7794-1271-0 (Print), 0-7794-1272-9 (PDF)
This bulletin was revised June 2008 to incorporate formatting changes and changes in ministry name and contact information only.
August 1, 2001 is the effective date of the changes to the tax on cigars.
22% is the prescribed percentage rate to be used where the taxable price of a cigar includes a prescribed percentage (refer to Formula for Taxable Price of Cigar and Calculation of Tax).
Well in advance of the August 1, 2001 effective date, you need to be designated as a Cigar Tax Collector if you are a wholesaler, importer, manufacturer or an existing tobacco tax collector and deal in cigars. Please send a completed Application for Registration form promptly to the address provided under General Information. Application forms were attached to Ontario Tax Bulletin TT 1-2001, Cigar Tax Changes. The forms are also available by calling the number provided under General Information.
Where the taxable price of a cigar equals the price for which the cigar was purchased by the retail dealer plus the prescribed percentage:
[(price of purchase by retailer)+(22% × price of purchase by retailer)] × tobacco tax rate on cigars = tax
The price of purchase by retailer includes all consideration given by the retailer of the cigar as well as federal excise, federal duty excluding GST and all costs and charges relating to mailing, delivery and transportation.
Where the importer or manufacturer of the cigar is also its retailer:
(price paid by consumer) × tobacco tax rate on cigars = tax
Where the importer or manufacturer of a cigar is also its retail dealer, there is no prescribed percentage added. In this instance, the taxable price of the cigar equals the price for which the cigar was purchased, by the consumer, inclusive of all consideration given by the consumer for the cigar as well as federal excise tax, federal duty excluding GST and all costs and charges relating to mailing, delivery and transportation (price paid by consumer).
The Client Services Branch will publish a bulletin detailing transitional matters regarding the changes to cigar tax in advance of the effective date.
If this bulletin does not completely address your particular situation, refer to the Tobacco Tax Act and related regulations, visit our website at ontario.ca/finance or contact:
Ministry of Finance
Client Services Branch
Commodity Revenue Section
33 King Street West
Oshawa ON L1H 8H9