Finance ministry officials say the proposed 0.5 per cent tax for transit will also apply on alcohol and private vehicle sales if the mail-in referendum passes this spring.
Although the province has said it intends to apply the new Congestion Improvement Tax to most of what is covered under the provincial sales tax, there’s been confusion over exactly that means.
One source of doubt is what the province considers to be a provincial sales tax – just the seven per cent PST or also the 10 per cent alcohol tax and the 12 per cent private vehicle sales tax.
A ministry spokesman said Wednesday the government also views both as provincial sales taxes and the extra half point would apply, raising the alcohol tax to 10.5 per cent in Metro and requiring private car sellers to add 12.5 per cent.
B.C. Restaurant and Foodservices Association president Ian Tostenson said the extra tax would be in addition to the five per cent GST charged on liquor sold in restaurants and bars.
“I don’t think we need a 15.5 per cent liquor tax in this province,” he said.
Many hospitality industry employees rely on transit to get to work, Tostenson said, but added the association of restaurants and bars hasn’t taken a referendum stand yet.
“We haven’t considered if we’re coming out as an industry to support or not support it. We’d like to see way more detail.”
The 12 per cent private vehicle sales tax was created after the harmonized sales tax was repealed to ensure equal treatment of private and dealer transactions, and to prevent a surge of curbers selling privately with little consumer protection.
The transit sales tax is also expected to apply on new vehicles sold at Metro dealerships.
New Car Dealers Association of B.C. CEO Blair Qualey has been pushing for an exemption but a ministry spokesman said that would reduce the expected $250 million a year to be generated by the tax for transit expansion.
The province has previously indicated the new tax may also be charged on new vehicles that are bought outside the region but end up registered in Metro, but it has yet to confirm that or explain how it would work.
Qualey said the car dealers association has not yet taken a position on the referendum.
“We’re in support of good road, bridge and transportation infrastructure, including public transit,” he said. “If cars and trucks were excluded we’d be all over it.”