The Ontario Ministry of Finance is responsible for administering the Tobacco Tax Act. Generally, provincial tobacco tax applies to all tobacco products sold in Ontario. Tobacco products include:
All purchasers of tobacco products in Ontario must pay the tax, except:
A retailer pays to the tobacco wholesaler an amount equal to the Ontario tobacco tax. That tax collected by the tobacco wholesaler, who is a designated collector, is reported and remitted to the Ministry of Finance. Retailers are repaid an amount equal to the tax paid to the wholesaler when selling tobacco products.
The current tax rates are:
Cigarettes sold in Ontario are also subject to federal excise duty and HST.
You need to register with the province if you:
Note: Tobacco in bulk is 10,000 or more cigarettes, 200 or more cigars or ten kilograms or more of any tobacco product other than cigarettes or cigars, such as fine cut tobacco.
To inquire about registering with the province:
Learn more about online applications here.
Before the Minister of Finance issues you a permit, registration certificate or a designation you may be required to provide and maintain acceptable security through a surety bond or letter of credit. Security helps ensure compliance with the Tobacco Tax Act (Act).
In most cases, the amount of security required equals the greater of the average of three month’s tax and an amount ranging from $10,000 to $1,000,000 depending on registration type(s).
Ontario has adopted the federal tobacco stamping system for marking packages of cigarettes and packages of fine cut tobacco that are sold in Ontario. Ontario’s tobacco stamp replaces the yellow tear tape on cigarette packages.
All packages of cigarettes and packages of fine cut tobacco sold to consumers who have to pay tobacco tax in Ontario must be marked with the ON DUTY PAID CANADA DROIT ACQUITTÉ tobacco stamp.
Cigarette and fine cut tobacco packages with a peach-coloured federal stamp may only be purchased for personal consumption:
The tobacco stamp contains security features and has a yellow background with the letters ‘ON’ in white and in black letters, the words ‘DUTY PAID CANADA DROIT ACQUITTÉ’.
Fine Cut Tobacco Packages
Unless authorized under the Act, it is against the law to buy, possess or distribute any quantity of unmarked tobacco products or any other untaxed tobacco product. Unmarked tobacco products are packages of cigarettes and fine cut tobacco that do not have the ON DUTY PAID CANADA DROIT ACQUITTÉ tobacco stamp. Under the Act, there are serious consequences for buying, possessing or distributing this type of tobacco product without authorization. You can be fined, sent to jail, have your tobacco products seized, your vehicle impounded and, if you are a retailer, prohibited from selling tobacco products for up to 180 days.
If you are convicted of possessing unmarked cigarettes for the purpose of sale you may be fined a minimum fine of $500 plus three times the tax on the unmarked cigarettes you were going to sell. You could also be sentenced to up to two years in jail.
Please see the Illegal Tobacco webpage.
To sell tobacco products to a consumer you need to hold a tobacco retail dealer’s permit issued under the Act. If you held a vendor's permit under the Retail Sales Tax Act that was valid on June 30, 2010, or are an authorized reserve retailer under Ontario's First Nations Cigarette Allocation System you are deemed to hold a retail dealer’s permit.
As a retail dealer you must ensure you buy tobacco products from a ministry-authorized wholesaler with a valid permit. This permit must be displayed in a prominent position at the wholesaler’s principal place of business. In addition, you should:
Learn more about basic rules for tobacco retailers.
See if a supplier is a registered wholesaler.
You need to hold a wholesaler's permit under the Act if you sell tobacco products for resale.
As a wholesaler, before you sell or deliver tobacco products to a retailer, you must to confirm that the retailer holds a retail dealer’s permit under the Act, a vendor’s permit under the Retail Sales Tax Act that was valid on June 30, 2010, or is an authorized reserve retailer under Ontario’s First Nations Cigarette Allocation System.
Both the Tobacco Tax Act and the Smoke Free Ontario Act prohibit a wholesaler or distributor from delivering tobacco products to a location that has been issued a notice of prohibition against the sale, storage and delivery of tobacco products. The Ministry of Health and Long-Term Care notifies wholesalers and distributors in writing of all tobacco retail locations that are subject to an Automatic Prohibition. Through an e-alert, the Ministry of Finance notifies wholesalers of tobacco retail locations that are temporarily prohibited from selling, offering for sale or storing tobacco products.
Once you register with the Ministry of Finance the ministry will mail to you each month a personalized return. You must complete this return, even if you did not have any activity during the reporting period.
Didn’t get a return this month? Please call the Ministry of Finance at 1 866 ONT-TAXS (1 866 668-8297).
You can file your return:
Retailers are not required to complete returns.
Completed tobacco tax returns, along with any tobacco tax payable, are to be delivered to the ministry by the 28th day of the month following the end of your reporting period.
There are a few exceptions, including:
How to complete your tobacco tax return.
If you collect tobacco tax, you may be entitled to a refund if tobacco products were:
If you purchase tobacco products for resale, you may be entitled to a refund of tobacco tax for:
Read more about bad debts.Download: application for refund due to loss of product [PDF – 230 KB].