Tax Refund for a Power Take Off

A power take off (PTO) operation refers to auxiliary equipment added to a licensed motor vehicle that uses clear diesel fuel, gasoline or propane from the vehicle's fuel tank(s) to operate PTO equipment, such as:

  • cement mixers
  • aerial buckets, lifts and cranes
  • refrigeration units
  • power vacuums, pumps and blowers.

If you paid tax on fuel used in Ontario to operate auxiliary PTO equipment, you may be eligible for a refund.

Can I get a refund?

The tax paid on clear fuel, gasoline or propane used for a PTO operation may be refunded if:

  • the motor vehicle is licensed under the Highway Traffic Act
  • use of the auxiliary equipment occurs in Ontario
  • the auxiliary equipment is powered using the same fuel tank that is used to power the motor vehicle
  • the power from the auxiliary equipment is not used to propel the motor vehicle
  • the motor vehicle is not principally used to transport passengers
  • the auxiliary equipment is not used for personal use, pleasure or recreation, and
  • tax has been paid to Ontario in respect of the fuel used during the PTO operation.

A refund must be filed and received by the Ministry of Finance (ministry) within four years from the date the tax was paid.

Calculating a refund – PTO activity before July 1, 2017

To measure fuel used during a PTO operation, you may use either:

  • readings from separate meters or electronic control modules that measure the fuel supplied to the auxiliary equipment, or
  • set allowances approved by the ministry for different kinds of PTO operations, based on information from equipment manufacturers.

Please contact the ministry at 1‑866‑ONT‑TAXS (1‑866‑668‑8297) to confirm if there is an approved allowance for your equipment.

Calculating a refund – PTO activity on or after July 1, 2017

Effective July 1, 2017, a PTO refund is calculated by applying a pre‑determined percentage allowance against the total fuel disbursed to the licensed vehicle containing the qualifying auxiliary equipment. The following gives the ministry allowances established according to an activity type (e.g., vacuum trucks, paper shredders, reefer units).

PTO allowance chart

40% Vacuum/Hydro Vac Trucks over 600hp
30% Paper Shredders
Ready Mix Trucks
25% Vacuum/Hydro Vac Trucks over 300 - 599hp
20% Cranes Rated over 11 tons capacity
Hydracrete Pump
Tow Trucks (Heavy Tows)
15% Blower
Vacuum/Hydro Vac trucks up to 299hp
10% Carpet/Duct Cleaning & Mobile Washing
Fire Vehicles
Garbage Packers (Front/ Rear or Side Loaders)
Loading/ Dumping
Lugger Unit
Pumping
Reefer/ Temperature Controlled
Roll Off Unit
Salting/Sanding
Stone Slingers
Utility Vehicles (Aerial Buckets, Cranes Rated up to 11 tons capacity, Digger Derrick, Tow Trucks)
Waste Disposal/ Recycling
Well Drilling
Winch Cable Truck
5% Auto Transport
Line Painters
Log Loaders
Street Sweepers

Please contact the ministry at 1‑866‑ONT‑TAXS (1‑866‑668‑8297) if you do not see your equipment type listed or are uncertain which allowance may apply to your business.

Refunds for interjurisdictional carriers

If you are an interjurisdictional carrier licensed under the International Fuel Tax Agreement (IFTA) and applying for a PTO refund, the refundable portion is calculated on the total distance travelled in Ontario during the claim period. The following example will help to explain how this will affect your refund:

  • assume that total travel of 10,000 km is reported within the quarterly period
  • Ontario travel is 2,000 km (out of the 10,000 km) accounting for 20% of the total
  • the fuel tax rate in effect for the quarter was 14.3 cents per litre
  • a ministry approved allowance determines PTO activity accounts for 1,000 litres of fuel
  • the PTO litres are multiplied by the proportion of Ontario travel
    • 1,000 litres x 20% = 200 litres
  • this result is then multiplied by the tax rate to arrive at the refund
    • 200 litres x $0.143 = $28.60

The IFTA program apportions tax on behalf of licensed carriers to the jurisdictions where travel is reported. In this example, Ontario retains 20 per cent of the tax paid on fuel purchases and 80 per cent is then shared by the other affected jurisdictions. As an IFTA licensee, your tax refund is limited by the same proportion of tax that Ontario has received.

How do I apply for the refund?

  1. Download the application form relevant to your claim period:

    Auxiliary Equipment Refund – PTO Activity before July 1, 2017

    Auxiliary Equipment Refund – PTO Activity on or after July 1, 2017

  2. Refer to the accompanying guide:

    Guide for completing the application – PTO Activity before July 1, 2017

    Guide for completing the application – PTO Activity on or after July 1, 2017

  3. Complete the application and mail to the ministry at the address noted below and be sure to include any supporting documents. Keep one copy for your records.

Send your application package to:

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

For refunds under $500

If the total of all refunds claimed for a calendar year does not exceed $500, you do not need to send supporting records with your application. Please note that all the information relating to the refund must kept for seven years and be provided in the event of a ministry audit.

Records and receipts

You must have accurate and verifiable records of your fuel purchases to support a PTO refund claim. Purchase invoices must show:

  • the name and address of the seller
  • the selling price per litre
  • the amount of tax charged
  • the quantity of product purchased, and
  • the date of the sale.

Invoices must be receipted or attach other proof of payment such as copies of cancelled cheques or a statement of account.

Additional records for PTO claims on or after July 1, 2017

Refund claims with activity on or after July 1, 2017, are based on a pre‑determined percentage of fuel disbursements. Therefore additional records must also accompany refund claims for this period to demonstrate fuel disbursements. These records are to be:

  • a monthly summary of all fuel issues covering the entire claim period
  • entries broken down by each licensed vehicle included in the claim, and
  • based on verifiable information that may include inventory reconciliation reports from bulk storage facilities, daily disbursement logs, receipts from retail fuel outlets, and issue tickets from card lock systems.

Retention period for records – all claim periods

Keep all records to support your refund claim for seven years after you apply. If you are selected for an audit, a ministry auditor will verify your claim by checking this information

Additionally, you may be asked to provide proof of your vehicle(s) registration, equipment ownership or lease arrangements, and PTO activity.

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