British Columbia (“BC”) has issued a new bulletin PST-117, “Motor Vehicle Dealer-Use and Manufacturer-Use Formulas” which contains information on how the provincial sales tax (PST) applies to the use of vehicles by dealers and manufacturers.
Generally, vehicles purchased for resale or for leasing to others are exempt from PST. However, for vehicles taken from inventory for own-use, PST must be self-assessed and paid.
As a dealer, the formula to calculate the tax payable depends on whether the vehicle is used:
- by an officer, salesperson or employee; or
- as a courtesy car, donated vehicle or parts delivery/shuttle vehicle.
A different formula applies for manufacturers.
A separate section in this document addresses non-qualifying uses for vehicles (i.e. vehicles not readily available for sale or lease). As well, the above formulas do not apply to vehicles leased to employees for their personal use.