This really burns me up inside.. It hasn't even made headlines in BC. Nicely tucked away and spun as a positive for 'used' car / aircraft dealers......
The provincial government may be fuelling the black market with a tax increase on private sales of cars, boats and airplanes that comes into effect July 1, the B.C. NDP says.
The B.C. government already charges the seven-per-cent provincial sales tax (PST) on private vehicle sales and had planned to keep it there, according to its September 2009 budget.
Sales of used vehicles, boats and aircraft by dealers will rise to 12 per cent when the new harmonized sales tax (HST) — which combines the PST and the five-per-cent federal goods and services tax (GST) — goes into effect July 1.
'The minister didn't want to put that front and centre'— B.C. NDP finance critic Bruce Ralston
But the B.C. government now plans to raise the PST on private sales of automobiles, boats and cars to 12 per cent the same day as the HST goes into effect.
Charging a higher tax on sales of used cars by private individuals will level the playing field, B.C. Finance Minister Colin Hansen said.
"The tax that's applied to the sale of used vehicles will be the same, whether you purchase it from a used car dealer or whether you purchase it from a private individual," Hansen said.
Extra revenue
Over the next two years, the government expects to generate about $120 million in extra revenue from the increased tax.
The opposition claimed the government tried to fly the tax increase under the public radar in the March 2 budget by mentioning it on page 80 of the budget document.
"The minister didn't want to put that front and centre, given his claim that the HST isn't a tax grab from British Columbians," said NDP finance critic Bruce Ralston.
The higher tax will hit those who cannot afford to buy new cars and that could fuel the black market in vehicles, Ralston said.
Hansen said he never made any secret of his plan to raise the tax, noting that he mentioned the plan in his budget speech in the legislature.
The opposition and the news media only picked up on the tax change on Thursday, Hansen said.
A regular car may go through 3-4+ re-sales in its lifetime and these may be private sales. When a new car is sold , it is sold with taxes applied to it We should NOT be required to pay additional taxes over and over again on the SAME car ESPECIALLY if it is sold privately and not for profit PERIOD , This is, as usual, Government highway robbery! And YOU , my fellow Canadian , just like me,, sit back and take it ,,,,,,,
I think what it will do is drive more operators into registering their aircraft in Alberta and "operating " it out of there. For years now I have known of operators doing just that. Setting up a corporation in Alberta, registering the aircraft to that corporation and leasing it to the operator in BC. When talking 7% on a million dollar aircraft the costs associated with setting up an Alberta Corporation are negligible. Heck even an aircraft valued at 100k its worth it. The only draw back I know is having to prove residency of Alberta to qualify for setting up an Alberta corporation. So remember if importing an aircraft in to the country and you know its ultimately going to end up in BC, make sure you clear Customs in Alberta to show the paper trail leading back to that province as the intended point or ownership. Unless of course this loop hole has been closed in the last couple years that I'm unaware of.
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How can you tell which one is the pilot when you walk into a bar?....Don't worry he will come up and tell you.
Who collects HST? Is it collected at point of sale?
In the past if I, an Albertan, bought a vehicle in BC, I would only pay the
dealership GST. Once I registered my vehicle in Alberta there was no PST paid.
When a BC resident buys a vehicle in BC when do you pay the PST. Is it at the time of sale or is it when you register the vehicle?
I guess my question is, if I travel to BC and buy a vehicle now do I have to pay HST even though I am going to register the vehicle in Alberta?
If so that will probably mean a few less sales for the BC dealerships.
Sad, I'm just looking at a Cessna Mustang for sale, registered in San Marino - if you keep it with its current registration, the owner just transfer you the 'trust account' holding ownership - and there is no taxes at all!!!!
Crazy-aviator I couldn't agree with you more, not to mention most of us would have paid income tax on the money we used to buy such used merchandise. I think what is going to happen is that they are going to find 2008 Cadillacs having $3000 on the bill of sale. Be a bit difficult for the seller to hide the excess 40,000 in their bank account...but still.
The PST is paid when you register the vehicle. If the declared price does not fall within a bracket set as the market value for the vehicle, you will have to explain why and they may look into it.
ahramin wrote:The PST is paid when you register the vehicle. If the declared price does not fall within a bracket set as the market value for the vehicle, you will have to explain why and they may look into it.
Growing up in the People Democratic Republic of BC people would always low ball the paper price, so on a vehicle sold for 10K the price would be 6K or lower on paper to save the buyer some tax. We would always check the blue book and find the lowest price and if that was too high there was a form available at your local ICBC dealer "Below Market Sale", fill out and the explanation would be along the lines of "needed to sell quickly only offer made on my vehicle after trying to sell for over a month" I don't know of anyone ever hassled doing that. Of course we had such high end quality vehicles back in high school
The introduction of the HST in BC as well as Ontario will result in an ITC for corporations or individuals registered. This will result in an overall savings vs existing GST + PST provinces. As an independant contractor...may be best to register for GST regardless of your annual "billings". Going to be a bad May and June selling vehicles new or used in Ontario or BC dealer or private.
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How do you go 205 kts TAS on 32 gal/hr without turbos!
midwingcrisis wrote:The introduction of the HST in BC as well as Ontario will result in an ITC for corporations or individuals registered. This will result in an overall savings vs existing GST + PST provinces. As an independant contractor...may be best to register for GST regardless of your annual "billings". Going to be a bad May and June selling vehicles new or used in Ontario or BC dealer or private.
Indeed, it will be worth holding off on purchasing a piston plane for commercial ops until after HST comes into place as what was previously a PST is now HST and therefore an ITC (input tax credit) that gets to be deducted from the GST the company collected and has to remit to the government.
It is the ONLY bright side I can see for small 703 operators with little in the way of ITCs, and who now have to charge their customers 7% more, as previously they did not have to charge PST!
Seems to me the answer here is simple - Both the seller and the buyer would amicably write "For the sum of 1 dollar" or "100 dollars", or whatever on the bill of sale.
If I lived in B.C., it'd be a cold facking day in hell that I paid full tax on a private purchase.
'48
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The fastest way to turn money into smoke and noise..
