Q. I am an Ontario-based owner-operator and I ran internationally for an Ontario-based carrier but now I am on with a domestic carrier. Do I have to pay PST on my truck lease or purchase?
A. You were exempt from PST if your carrier was registered under IRP (International Registration Plan) on your truck lease or purchase and any repairs & maintenance that were completed at a repair facility. However with the implementation of the HST you will pay HST on leases, purchases and repairs & maintenance (which of course would be claimed back). Further you will pay an "exit" tax on the value of your truck.
Q. I am obtaining a new highway tractor. Should I buy or lease?
A. If you were to buy the new rig then usually a larger down-payment is required; you can claim the GST/HST immediately; interest on the truck loan is expensed and the truck's capital cost is claimed over time. Buying the rig results in a fluctuating expense each year.
On the other hand, if you were to lease the new rig, normally a lower down-payment is required; the down-payment is expensed over the term of the lease; and the GST/HST is claimed on each payment. Leasing the rig results in an equal expense each year.
Copyright 2011 The Transport Advisor Limited
