British Columbia Issues Luxury Surtax PST Notice on Vehicles

British Columbia has issued Provincial Sales Tax Notice 2018-003, “PST Rate Change for Passenger Vehicles Worth $125,000 or More”, which outlines how the luxury vehicle surtax applies to passenger vehicles leased or purchased in the province.

As announced in the British Columbia 2018 budget, effective April 1, 2018, the PST rates for vehicles worth $125,000.00 or more will increase.  The PST rate on passenger vehicles with a purchase price between $125,000.00 and $149,999.99 will increase from 10 to 15 percent, while the PST rate for passenger vehicles with a purchase price of $150,000.00 or more will rise from 10 to 20 percent.  Similarly, the PST rate on private sales of passenger vehicles with a purchase price from $125,000.00 to $149,999.99 will be increased from 12 to 15 percent, and the PST rate for passenger vehicles with a purchase price of $150,000.00 or more will increase from 12 to 20 percent .  Generally, a purchaser is liable for the PST on the earlier of the date that the amount for the taxable supply is paid or it becomes due.  It is this date that will determine if a passenger vehicle purchase will be subject to the new PST rates.

In addition, when the 15% or 20% PST rate applies to a passenger vehicle, the PST will be included in the consideration subject to GST.