GST on a used vehicle

[transplant99]

Originally Posted by Hockeyguy15

Ummm I think you mean mind-bottling....

Nope....pretty sure I meant what i said....unless I am missing something.

[transplant99]

Originally Posted by You Need a Thneed

Corporations pay tax on the initial vehicle, but can deduct it on thier net GST return. At that point, the government is net $0 in collecting GST on the vehicle. When the corporation sells the vehicle, they must charge GST on it, so that there is GST payable to the governemnt for the vehicle. If another corporation buys it, they will get that GST paid back on their GST return.

No I understand all that, but it puts the used car dealer at a rather distinct disadvantage as two vehicles of the exact same kind can be on the market and only one has to charge GST.

[Hockeyguy15]

I guess some of you haven't seen Blades of Glory



Chazz: Mind-bottling, isn't it?
Jimmy: Did you just say mind-bottling?
Chazz: Yeah, mind-bottling. You know, when things are so crazy it gets your thoughts all trapped, like in a bottle?

[HOOT]

Originally Posted by transplant99

No I understand all that, but it puts the used car dealer at a rather distinct disadvantage as two vehicles of the exact same kind can be on the market and only one has to charge GST.

At least it's not like BC. Here we have to pay 12% tax on new AND used cars. So if a vehicle is sold 5 times in it's life BC takes 60% worth of taxes.

[The Yen Man]

Originally Posted by HOOT

At least it's not like BC. Here we have to pay 12% tax on new AND used cars. So if a vehicle is sold 5 times in it's life BC takes 60% worth of taxes.

Really? That doesn't sound fair at all. Was this after the HST was introduced? That HST was purely a tax grab by the government. It's nuts how much more money that will generate for the province.

[transplant99]

Originally Posted by Hockeyguy15

I guess some of you haven't seen Blades of Glory



Chazz: Mind-bottling, isn't it?
Jimmy: Did you just say mind-bottling?
Chazz: Yeah, mind-bottling. You know, when things are so crazy it gets your thoughts all trapped, like in a bottle?

LOL! That is just disturbing...nope never saw that movie.

[HOOT]

Originally Posted by The Yen Man

Really? That doesn't sound fair at all. Was this after the HST was introduced? That HST was purely a tax grab by the government. It's nuts how much more money that will generate for the province.

Yes and no. Before HST people had to pay 7%(PST) on used vehicles and 12%(GST+PST) on new vehicles. Now with HST they charge the same for both. It's ridiculous! IMO it helped dealerships out because if you have to pay HST why not get a warranty on your used vehicle.

[mykalberta]

Is HST 12% or is it lowered like in the maritimes etc?

[You Need a Thneed]

BC HST is 12%.

[mykalberta]

Ahh, I can see why all the fuss over there. I assumed harmonized combined the taxes and lowered them slightly.

I believe that is what happened in Atlantic provinces, that could be a special deal for just them though.

[squiggs96]

Originally Posted by The Yen Man

Really? That doesn't sound fair at all. Was this after the HST was introduced? That HST was purely a tax grab by the government. It's nuts how much more money that will generate for the province.

The HST isn't a pure tax grab by the government. The BC provincial government still only gets their 7%, but they get a large kickback from the federal government. The province and companies save on PST audits and administrative work. This will allow BC to charge lower income taxes. The HST helps mostly small and medium businesses that are now able to claim the provincial portion of the HST, whereas before they provincial portion would be expensed instead of being claimed for a refund. This, in theory, will allow businesses to have more cash available to either lower prices, increase staff, increase wages and/or lower debt.

The downfall is some items (accounting services, restaurant meals, new housing, used cars) now have increased taxes. Since it is a consumption based tax, it only negatively affects people that are actively consuming goods and services and doesn't punish those who don't. The majority of my company's business is building and selling real estate, so it negatively affected our bottom line, but it is still makes the province stronger economically and administratively.

For the vast majority of goods and services, people were already paying 12%, but it was split between the PST and GST. Now people get a bigger HST rebate than they were receiving when they had a GST rebate. Goods that were GST exempt are still HST exempt, such as school supplies, baby clothes, basic groceries, etc. Many people will complain that they are out huge amounts of money from this terrible tax, but the reality is, most people are about cash flow even when all things are considered.

In my opinion the biggest industry hit was the restaurants. I would guess that overall sales are down, which will cause tips to servers to be down. As a former server and bartender who paid his way through university on tips, I feel their pain.

I don't enjoy paying the HST on cars, but maybe this will make people drive their cars a little longer, thereby reducing the amount of depreciable assets they own. Sorry for going a little off topic.