REVscene Automotive Forum - ICBC Transfer of Ownership PST rate and being overcharged.

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ICBC Transfer of Ownership PST rate and being overcharged.

Hey guys,

I figure I would post up here what I have recently found and won in my fight against ICBC upon paying up the PST on my recently purchased Honda Ruckus.

I recently purchased a Honda Ruckus 49cc scooter from a friend, prior to purchasing it, as what would any good person do, I did a budget on what I wanted to spend for it, including insurance and any of the taxes it takes to transfer over to my name.
I first called ICBC and inquired about what PST tax rate I should be paying when transferring over this scooter and was very assuredly told it was 12% PST.
Not entirely thrilled about having to pay so much in taxes, I began to research on the Ministry Of Finance website and came across the following published documentation:
http://www.sbr.gov.bc.ca/documents_l...ns/pst_308.pdf
Where it clearly states:

Quote:

Definitions
a passenger vehicle is a motor vehicle designed primarily as a means of transport for
individuals, including trucks and vans that are ¾-ton or less. Trucks and vans that are
larger than ¾-ton, camperized vans, motor homes, buses, ambulances, hearses and
motorcycles with engines of 250 cc or less are not passenger vehicles. For more
information on what is a passenger vehicle, please see Bulletin PST 116, Motor Vehicle
Dealers and Leasing Companies.

I then dug deeper into the Bulletin PST 116:

http://www.sbr.gov.bc.ca/documents_l...ns/pst_116.pdf

Quote:

Passenger Vehicles
In this bulletin, a vehicle is a passenger vehicle if the vehicle is:
 a truck or van that is ¾-ton or less,
 a station wagon, or
 a motor vehicle designed primarily as a means of transport for individuals, other than:
• a motor home, bus, ambulance or hearse
• a motorcycle with an engine capacity of 250 cc or less

That last line is especially important here. The tax documentation is laid out such that the base rate of PST is 7%, except for Passenger Vehicles which are 12% and defined in the documentation I linked to.
Therefore from here one would assume that a 49cc scooter like mine (which are actually very popular in this city), would not be considered a Passenger Vehicle and as such would be charged at 7%.

I sent my findings and inquired with the Ministry Of Finance's help email (CTBTaxQuestions@gov.bc.ca) and surprisingly got a response back in 48 hours from the Ministry Of Finance Rulings and Interpretations Team confirming what I had assumed. That my 49cc scooter was in fact not defined as passenger vehicle and should therefore not be charged the 12%.

Here comes the problem, I showed up to an Autoplan broker (BCAA in Richmond to be exact) and started filing my paperwork and the agent immediately started entering it the 12% tax rate.
I explained to him what I had found, and even mentioned the ruling from the Ministry Of Finance that stated that I should be charged the 7% rate.
He brought in his manager, who also immediately assumed that it was 12%, and I correctly him as well, and also quoted the email I had received from my ruling.
Both were completely unaware but helpful and willing to confirm with ICBC if this was in fact the case (I had to say their service was great, so this is not a knock on them).

The agent who at this point was trying to look into their ICBC front page documentation about what the tax rate and the exceptions, really couldn't find any mention about the 249 cc or less motorcycle designation.
He then called ICBC helpline and inquired with them, who then stated that is was 12%, and at this point, the agent started fighting the case for me. Acknowledging my emails and communications.
The ICBC agent and the BCAA agent both asked me to forward the email I had received from the Ministry Of Finance to them.
The ICBC agent at this point brought in his manager who also read this email and had a long pause upon the realization that it's possible that since April 1, 2014 they might possibly have been charging people 12% instead of 7% PST.
The issue here is that the computer system that ICBC uses would not in any way acknowledge or accept a 7% tax rate.
The BCAA agent in fact had to really do a lot of side setup to make it accept the rate.
So this is definitely a systemic issue on ICBC's part.

I want to bring this to light, as I am sure that a lot of people have been paying the full tax rate and could potentially be owed money back from either the government or ICBC.

In the end, I ended up only paying the 7% rate. The agent at BCAA laughed and congratulated me on finding this and "stumping ICBC".

:notbad:

I have 2 trucks purchased recently that are over 3/4 ton. Will have to look into this more.

Good find OP :thumbs:

maybe take this to the news?

Take this to the news they love to shit on ICBC.

Good on yeah, bro. Keep up the good work!

: )

In light of the other recent story about ICBC overcharging on some coverages, yeah, I'd think the news would eat this up.

Edit: in before the usual anti-ICBC, anti-establishment bullshit - it's a systemic error, it's been found, it will be fixed, and no doubt people will be reimbursed as appropriate. It CAN happen in any bureaucracy, it DOES happen from time to time... get over it.

Blame the antiHSTers who forced the change in the Pst system

As someone who has bought and sold a few 250cc bikes, this is great to know. Good work and thanks to OP.

ICBC will have to do a ton of reimbursements/refunds to a lot of people if this is brought out to the public. Good find OP.

Very interesting indeed. I've always advised 12% PST based on the bulletins they released when we transitioned back into PST. We went from TDP to PST2 and they've never said anything about exceptions.

I'll see what i can find out tomorrow.

Taxes are collected on behalf of the Consumer Taxation Branch by ICBC and i would assume it would be refunded by CTB (not sure how this would work). Usually you would have to write into CTB with a copy of your APV9T (transfer tax form) and explain your situation.

I've sent a message to CBC News Vancouver, anyone have any other news orgs i should send a message out to?

Quote:

Originally Posted by theurgy1 (Post 8517859)

I've sent a message to CBC News Vancouver, anyone have any other news orgs i should send a message out to?

http://bc.ctvnews.ca/2.1141/steele-on-your-side

Dammit,I imported a 250cc motorcycle awhile back and paid 12% on it... now the question is how to claim back that 5%! I mean at the end of the day it's only $60... but still!

Quote:

Originally Posted by 68style (Post 8517867)

Dammit,I imported a 250cc motorcycle awhile back and paid 12% on it... now the question is how to claim back that 5%! I mean at the end of the day it's only $60... but still!

$60 alot man :( a full tank of gas .. or almost a weeks worth of food for me :(

Exactly... it's your money. I've sent this to a number of news agencies and have gotten some responses back.
If this story breaks, I can assume that this will force ICBC to go back to into their previous systems and most likely issue reimbursements.
Kind of embarrassing considering their last issue with overcharging their customers.

Quote:

Originally Posted by 68style (Post 8517867)

Dammit,I imported a 250cc motorcycle awhile back and paid 12% on it... now the question is how to claim back that 5%! I mean at the end of the day it's only $60... but still!

I'm not sure if this is only valid for transactions after April 1, 2014 or does it apply to transactions earlier than that?

Quote:

Originally Posted by 68style (Post 8517867)

Dammit,I imported a 250cc motorcycle awhile back and paid 12% on it... now the question is how to claim back that 5%! I mean at the end of the day it's only $60... but still!

Would be about $800 for me for one truck last september

Quote:

Originally Posted by Eff-1 (Post 8517912)

I'm not sure if this is only valid for transactions after April 1, 2014 or does it apply to transactions earlier than that?

I think OP might have put the wrong date? Nothing happened in April 2014 that I know of... but the HST went buh-bye in April of 2013 which is probably what he meant to put?

I don't blame the HST for this as someone mentioned above though... this was a little scam left behind from the government to even things out between private sales and dealer sales with a LOT of pressure from the automobile dealers association of BC being applied... huge scam. It's a total scam you have to pay any tax whatsoever on a used vehicle in the first place let alone keeping it at 12% even after HST got scrapped (for better or worse).

Tax refunds are not done through ICBC.

If you believe you've been taxed incorrectly, please fill out this form and submit it to Consumer Taxation Branch for a refund.

http://www.sbr.gov.bc.ca/documents_l...0355MVFILL.pdf

Besides the definition, I could not find anything that clearly indicates the before mentioned vehicles should be taxed 7%. If someone could please find a clear statement of that with the percentage of tax that should be charged for non-passenger vehicles.

Here's what a found:

Quote:

Passenger vehicles may be subject to luxury surtax. Non-passenger vehicles are not subject to luxury surtax.

The following are considered non-passenger vehicles:

•golf carts
•snowmobiles and snow vehicles
•all-terrain vehicles and work-utility vehicles
•camperized vans
•motorhomes
•tractors (farm and industrial)
•buses
•ambulances
•hearses
•motorcycles with engine capacity of 250 cc or less
•trailers
•trucks and vans greater than 3/4 ton

Quote:

Luxury surtax applies to passenger vehicles when the
value for tax exceeds:
$55,000 to $55,999.99 7% plus 1%
$56,000 to $56,999.99 7% plus 2%
$57,000 and over 7% plus 3%

For tax purposes, a passenger vehicle is defined as
a motor vehicle designed primarily as a means of
transport for individuals. For example, trucks and
vans larger than three-quarter ton, camperized vans,
motor homes, buses and motorcycles with engines of
250 cc or less are not passenger vehicles.

Quote:

Will private vehicles sales be taxed at 7% or 12%? And will it be PST or a separate tax?

The following transactions are currently subject to the 12% tax on designated property (TDP):

vehicles, boats and aircraft purchased at a private sale in B.C.
vehicles purchased at a private sale in another province and then brought or sent into B.C.
vehicles brought or sent into B.C. that were received as a gift (some exemptions apply)
As part of the re-implementation of the PST, effective April 1, 2013, the 12% tax rate on these transactions will continue as PST under the new PST legislation.

Note: the 12% rate will only apply where the sale is not subject to GST. This ensures private sales are subject to a similar tax treatment as sales by GST registered businesses.

OP can you please post your email from CTB?

Nice find OP, good on your for doing your homework. I certainly would have just phoned, and when someone told me the percentage, I would have just assumed they were correct.

Spoiler!

Quote:

Originally Posted by bklam (Post 8518077)

Here's how it breaks down.
Go to the finance page:
Revenue Division

Click on the Provincial Sales Tax link:
Provincial Sales Tax - Consumer Taxes

Quote:

Provincial sales tax (PST) is a retail sales tax that is payable when a taxable good or service is acquired for personal use or business use, unless a specific exemption applies.
The PST generally applies to:
the purchase or lease of new and used goods in B.C.
goods brought, sent or delivered into B.C. for use in B.C.
the purchase of:
software
services to goods such as vehicle maintenance, furniture assembly, computer repair
accommodation
legal services
telecommunication services, including Internet services and certain digital and electronic media content such as music and movies
gifts of vehicles, boats and aircraft
If your business is required to register to collect PST, you must charge and collect PST at the time the tax is payable, unless a specific exemption applies. You report and pay the PST you collect as well as the PST you may owe on items you use in your business.

Tax Rates
Generally, the rate of PST is 7% on the purchase or lease price of goods and services, except for the following:
Accommodation (PDF) is 8% plus up to 2% municipal and regional district tax
Vehicles (PDF) is 7% - 10% or 12%

.. I cropped out the rest as it doesn't apply.

Now when you click on the link for Vehicles, they then define what a vehicle is, which I've mentioned in my first post.

Here is the email I received from the Ministry Of Finance (I will edit it to remove specific people's names).

Quote:

From: CTBTaxQuestions FIN:EX
Sent: Aug 13 (5 days ago)
To: me
Thank you for your inquiry.

British Columbia’s provincial sales tax (PST) is now in effect at a general tax rate of seven percent. You can access the legislation and regulations at the following links:

· Provincial Sales Tax Act (PSTA)

· Provincial Sales Tax Exemption and Refund Regulation (PSTERR)

· Provincial Sales Tax Regulation (PSTR)

PST applies to retail sales and leases of tangible personal property (TPP -- goods), software, related services, legal services, telecommunication services, and accommodation, unless a specific exemption applies.

The nature of the exclusions from the definition of “passenger vehicle” is confirmed by the bulleted list that you cite from Bulletin PST 116 - Motor Vehicle Dealers and Leasing Companies.

You indicate that the scooter has an engine of 49cc. The scooter would generally fall into the class of vehicles known as motorcycles. As the scooter has an engine less than 250cc, the scooter does not qualify as a “passenger vehicle” for the purposes of the PSTA. Consequently, PST is due at the rate of 7%.

You may provide this ruling to the ICBC agent at the time that you register the scooter if there is any disagreement on the matter (they should be aware of this, as it is not an unusual matter).

If you have further questions, please contact our phone staff at 1-877-388-4440. Phone staff are available from 8:30am to 4:30pm, Monday to Friday.

To receive updates about the re-implementation of the PST, please visit the following web page and click the button to “Subscribe To Receive Updates” which is located near the top right of the page.

More information on British Columbia’s return to the PST, including information on transitional provisions, registration information and collecting and remitting the PST, can be found in a new series of PST Bulletins and Notices. In addition, please see our Forms Page and Small Business Guide to PST.

This correspondence describes how the Ministry interprets the relevant tax provisions for information purposes only. This response may be impacted by variations in circumstance, subsequent changes to legislation or subsequent court decisions. The Ministry is not responsible for updating this response if there are any subsequent changes to the law. This response is provided as an aid to understanding the legislation and is not intended to replace the legislation.

Rulings and Interpretations Team
Ministry of Finance
Consumer Taxes - Taxes & Rebates

Based on that email, it did not mention anything about private sale. Their email is correct when saying that tax is 7% based on...

Quote:

PST applies to retail sales and leases of tangible personal property (TPP -- goods), software, related services, legal services, telecommunication services, and accommodation, unless a specific exemption applies.

7% PST is charged when you purchase through a dealer or a business with a GST/PST number.

Quote:

You indicate that the scooter has an engine of 49cc. The scooter would generally fall into the class of vehicles known as motorcycles. As the scooter has an engine less than 250cc, the scooter does not qualify as a “passenger vehicle” for the purposes of the PSTA. Consequently, PST is due at the rate of 7%.

^This is also correct if it was from a dealer. If it was something else and over the specific threshold, it would be more than 7% plus luxury tax.

Private sale is still 12%. The person who emailed you based their findings on a retail transaction and not a private sale transaction.

I would email them back and have them clarify.

Bottom line, you got lucky that you got away with 7% on a private sale as there is a tax rate difference for dealer sales vs private sales.

When I sent them the email, I clearly indicated that this was a sale from a private individual to another private individual.

Retail doesn't necessarily mean a brick and motor store under the tax designation. It means someone placed an item up for sale and sold it. There is no specification with regards to who sells it, whether it be a licensed retailer or a private individual.

Quote:

Originally Posted by 68style (Post 8518024)

Agreed.

Paying sales tax on the private sale of a used good, which had already had sales tax paid when it was first sold is just pure double-dipping by the government.

And the new definition of "related individual" is extremely narrow. For example, an Aunt or Uncle now cannot gift a vehicle to a Niece or Nephew. A blood relative is not enough of a "related individual"? What the fuck?