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Rented wooden pallets used to ship consumer goods are exempt from retail sales tax.
The Minister of Finance appealed a decision declaring that the respondent is exempt from paying retail sales tax on wooden pallets it rents to ship consumer goods.
The application judge found the pallets were exempt under s. 7(1)41 of the Retail Sales Tax Act because they were attached to or incorporated into tangible personal property for the purpose of sale, and were not returnable containers.
The Court of Appeal upheld the decision, finding that the transfer of pallets to customers constituted a sale for consideration, as the rental costs were built into the product price, and the final product sold was a palletized package.
Leave to appeal denied; Rule 14 application appropriate for determining taxpayers' rights via statutory interpretation.
The moving party sought leave to appeal an order dismissing its motions to strike, stay, or quash notices of application brought by three corporate taxpayers.
The responding parties raised preliminary objections that the order was final, not interlocutory, and that the motion for leave was out of time.
The Divisional Court held that the order was interlocutory because it dealt with procedure rather than substantive rights, and that the motion was timely because time ran from the date the order was settled.
On the merits, the court found no reason to doubt the correctness of the motions judge's decision that a Rule 14 application was an appropriate procedure for determining taxpayers' rights based on statutory interpretation.
The applications for leave to appeal were dismissed.
