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1 PDF Version [Printer-friendly - ideal for printing entire document] SOCIAL SERVICE TAX ACT published by DISCLAIMER: These documents are provided for private study or research purposes only. Every effort has been made to ensure the accuracy and completeness of the material; however, cannot guarantee its legal accuracy and does not accept responsibility for loss or inconvenience suffered by users as a result of inaccuracies. The material is not admissible in a court of law in accordance with the Evidence Act of British Columbia. For such purposes official Queen s Printer copies of Acts and regulations must be obtained.

2 SOCIAL SERVICE TAX ACT 431 [includes 2004 Bill 7 amendments (effective March 31, 2004)] Contents PART 1 - General 1. Definitions 2. Proof of residence in British Columbia 3. Deputy commissioners 3.1 Demand for information 4. Confidentiality 4.1 Valuation of purchase price, lease price or fair market value PART 2 - Imposition of Tax Part 2: Division 1 Tax in relation to Purchase and Use -- Sections 5-10 of Part 2, Division Provincial sales tax 6. Rates of tax 7. Liquor sold under special occasion licence 8. Reusable containers 9. Tax if use of property changes 10. Tax if trade-in allowed on purchase -- Sections of Part 2, Division Tax if property brought into B.C. for use 12. Calculation of tax if use in British Columbia temporary 13. Calculation of tax if property is conveyance used interjurisdictionally 14. When tax is to be paid on property coming into British Columbia 15. Tax if conveyance purchased in B.C. for interjurisdictional use 16. Tax if property brought into British Columbia by non-residents 17. Repealed 17.1 Conversion to litres of propane 18. How tax is to be calculated 19. Effect of depreciation on purchase price valuation Part 2: Division 2 - Tax in relation to Leases 20. Tax on leases in British Columbia 20.1 Tax on motor vehicle leased outside British Columbia 21. Tax if leased property brought into British Columbia 22. Tax if sale and lease-back of conveyance 23. Tax must be calculated separately for each rental period 24. When tax must be paid Page 2 of 105

3 25. Tax if balance of lease price becomes due 26. Additional tax on passenger vehicle rentals 27. Repealed Part 2: Division 3 - Tax in relation to Multijurisdictional Vehicles 28. Definitions 29. Tax if multijurisdictional vehicle licensed 30. When tax must be paid 31. Tax if vehicle ceases to be multijurisdictional 32. Tax if fleet licensing changed 33. Credit or refund if tax previously paid 33.1 Refund or credit for trade-in vehicles 33.2 Refund for replacement vehicles 34. Liability of other persons 35. How tax is to be calculated Part 2: Division 4 - Services Related to Purchase 36. Tax if contract for property conversion related to purchase 37. Tax if contract for modification of purchased property 38. Tax exempt property 39. Application of other provisions of Act Part 2: Division 5 - Taxable Services 40. Tax on the provision of taxable service in British Columbia 41. Tax if service provided to British Columbia resident 42. Exceptions from tax 43. Valuation of purchase price by commissioner 44. How tax is to be calculated 45. Application of other provisions of Act Part 2: Division 6 - Legal Services 46. Tax if legal services provided in British Columbia 47. Tax if legal services provided to British Columbia resident 48. Exception for legal aid services 49. When tax must be paid 50. Liability of other persons 51. General matters 52. Application of other provisions of Act Part 2: Division 7 - Telecommunication Services 53. Tax on provision of telecommunication services 54. Tax on provision of dedicated telecommunication services 55. Calculation if telecommunication only partly through dedicated system 56. Exceptions from tax 57. When tax must be paid 58. Valuation of purchase price by commissioner 59. How tax is to be calculated Page 3 of 105

4 60. Application of other provisions of Act Part 2: Division 8 - Tax in relation to Parking Rights 61. Parking tax 62. When tax must be paid 63. Valuation of purchase price by commissioner 64. How tax is to be calculated 65. Application of other provisions of Act 65.1 Tax collection Part 2: Division 9 - Environmental Levies 66. Definitions 67. Environmental levies on new tires and batteries 68. Environmental levies on hazardous products PART 3 Exemptions -- Sections of Part Exemption for minimal sale 69.1 Sales of taxable and non-taxable property and services 70. Exemptions in relation to food, clothing and shelter 71. Exemptions in relation to health and safety 72. Exemptions in relation to publications and school supplies 73. Exemptions in relation to agriculture and fisheries 74. Exemptions in relation to fuel, energy and conservation -- Sections of Part Exemptions in relation to transportation 76. Exemptions in relation to industry and commerce 77. Other general property and services exemptions 78. Exemptions for purchases intended for resale or lease 79. Other exemptions 79.1 Limit on exemptions PART 4 Refunds -- Sections of Part Limits on refunds 81. Application for refund 82. Refund of tax paid in error 82.1 Refund of taxes in accordance with Nisga a Nation Taxation Agreement 83. Contracts to improve real property 84. Purchases returned to seller 85. Claiming races Page 4 of 105

5 -- Sections of Part Conveyances used interjurisdictionally 87. Property shipped out of British Columbia 88. Farm use property 88.1 School use property purchased by parents advisory councils 89. Repealed 90. Deduction for bad debts 90.1 Former transitional refunds remain available 90.2 Purchases or leases of alternative fuel vehicles PART 5 - Collection of Taxes Part 5: Division 1 Local Collectors -- Sections of Part 5, Division Tax not to be absorbed by seller or lessor 92. Vendors and lessors must be registered 93. Seller or lessor deemed to be agent of minister 93.1 Tax payment agreements 94. Collector deemed to act under Financial Administration Act 95. Allowance for collection of tax 96. Time when tax is to be collected and remitted 97. Duty to make returns of tax collections 98. Duty to maintain records 99. Commissioner s certificate required for sales in bulk -- Sections of Part 5, Division Sale and lease-back documentation 101. Purchaser, user or lessee liable for tax 102. Tax collected deemed to be held in trust for government 103. Lien against property if taxes not collected, remitted or paid 104. Responsibility of person having control of collector s property 105. Notice to taxpayer before taking proceedings -- Sections of Part 5, Division Recovery of taxes due or collected by court action 107. Commissioner s certificate equivalent to court order 108. Attachment of amounts to be paid to person liable for tax 109. Limitation period for recovery proceedings 110. Application for injunction 111. Exercise of powers for recovery of taxes or collections 112. Commissioner may require bond deposit Part 5: Division 2 Collection Agents Page 5 of 105

6 112.1 Definitions Application Duties of resident taxpayer Detention of tangible personal property Tax payable even though exemption claimed Agreement with federal government Immunity of collection agent PART 6 - Inspections, Audits and Assessments 113. Inspection and audit powers 114. Search warrant may be issued if tax not paid 115. Assessments 116. Determination of tax collected Assessments, estimates and penalties 117. Penalty and interest PART 7 - Appeals 118. Appeal to minister 119. Appeal to court 120. Collection of taxes unaffected by pending appeals PART 8 - Offences 121. General offence rule of Offence Act does not apply 122. Liability of corporation officers 123. Offences 124. Onus of proof 125. Prosecution evidence 126. Information or complaint may relate to more than one offence 127. Limitation period for laying charge PART 9 - Regulations 128. General regulation making authority 129. Regulations exempting specified persons 130. Regulations in relation to vehicles and other conveyances 131. Regulations in relation to taxable services 132. Regulations in relation to legal services 133. Regulations in relation to telecommunications 134. Regulations in relation to parking rights 135. Regulations in relation to environmental levies 136. Regulations in relation to claims of solicitor client privilege 137. Regulations specifying tax for coin-operated purchases 138. Other regulations NOTE: Historical notes for this document do not include citations prior to Page 6 of 105

7 PART 1 - General Definitions 1. In this Act: "12 month period", in relation to tangible personal property, means for the purposes of section 12 (2) and 14 (1) (a) (a) the period beginning on the date the property is first brought or sent into, or is delivered in, British Columbia during any year and ending on the day before the first anniversary of that date, and (b) if the property is in British Columbia for a continuous period that is longer than the period referred to in paragraph (a), the period beginning on the day after the immediately previous 12 month period and ending on the day before the first anniversary of that date; "apparatus", for the purposes of the definition of fixture, means a complex machine or device designed to accomplish a specific purpose and consisting of an integrated assembly of parts each having a definite function; "assessment" includes reassessment; "catalyst" means a substance that produces or modifies a chemical reaction and that, at the end of the reaction, is unchanged; "collector" means a person who has collected taxes under this Act; "commissioner" means the person appointed by the Lieutenant Governor in Council to administer this Act; "conveyance" does not include a vehicle; "dedicated telecommunication service" means the right, whether exercised or not, to send from British Columbia or receive in British Columbia one or more telecommunications by using a circuit, a communications channel, a partial communications channel or any other means of sending or receiving a telecommunication that is dedicated to the exclusive use of the purchaser of the service; "dedicated telecommunication system" means a circuit, a communications channel, a partial communications channel or any other means of sending or receiving a telecommunication that is dedicated to the exclusive use of a person as a result of that person having purchased the right to send from British Columbia or receive in British Columbia one or more telecommunications by that circuit, communications channel, partial communications channel or other means of sending or receiving a telecommunication; "direct agent" means a substance that produces or modifies a chemical reaction and that is consumed in the chemical reaction to the point of destruction or dissipation or uselessness for Page 7 of 105

8 any other purpose; "entry date", in relation to any tangible personal property, means the date on which the person liable to pay the tax on the property first brings or sends the property into, or receives delivery of the property in, British Columbia; "fair market value" means (a) in relation to tangible personal property, other than rights or services deemed to be tangible personal property under section 39, 45, 52, 60 or 65, the price at which the legal and beneficial interest in the tangible personal property would, if unencumbered, be conveyed by a willing seller acting in good faith to a willing buyer acting in good faith in an arm's length retail sale in the open market, and (b) in relation to a parking right or service, including a service under Division 4, 5, 6 or 7 of Part 2, the price at which the right or service would be provided by a willing seller acting in good faith to a willing buyer acting in good faith in an arm's length retail sale in the open market, and must be determined in a manner that includes any charges, costs or expenses referred to in paragraph (a) (i) or (ii) of the definition of "purchase price", and for the purposes of section 11 (4.1), must be determined in a manner that also includes any costs or expenses referred to in paragraph (a) (ii) of the definition of "purchase price" that were incurred by the person who provided the gift; "fixture" means machinery, equipment or apparatus that is (a) a fixture at common law, and (b) used directly in the manufacture, production, processing, storage, handling, packaging, display, transportation, transmission or distribution of tangible personal property or in the provision of a service; "Greater Vancouver Transportation Authority" means the authority established under the Greater Vancouver Transportation Authority Act; "Greater Vancouver transportation service region" has the same meaning as transportation service region has in the Greater Vancouver Transportation Authority Act; "interjurisdictional commercial purposes" means, in relation to a vehicle, use of the vehicle in British Columbia while the vehicle is engaged in interprovincial or international trade for the commercial carriage of passengers or goods; "lease" means an agreement under which a person is given a right to use tangible personal property, but does not include (a) a lease of tangible personal property if, as part of the agreement between the parties, the person supplying the tangible personal property supplies a person to operate it, or (b) the leasing of furnishings if (i) the furnishings are leased under an agreement to lease a house, apartment or other residential accommodation, and (ii) the rent payments under the lease are not divided into separate amounts Page 8 of 105

9 for the accommodation and the furnishings; "lease price" means the total consideration paid by the lessee to the person granting a lease for each rental period under the lease for the right to use the leased property, and includes (a) any payment or consideration or part of a payment or consideration that is, or is expressed to be, a licence fee or royalty fee, (b) any payment or consideration, in addition to those made for rental periods, by a lessee to a person granting a lease for the right to use the leased property, including a down payment, (c) any payment or consideration, including a membership fee, that is in addition to payments or consideration for rental periods, a substantial benefit of which is a reduction in the lease price of tangible personal property, (d) any payment or consideration, or part of a payment or consideration, that is based or calculated on a measure of the use made by the lessee of the leased property, (e) if the property is leased outside British Columbia and subsequently brought, sent into or received in British Columbia for use in British Columbia, the charges to the lessee for customs, excise, transportation, service and other similar costs incurred by the lessee before the lessee uses the leased property in British Columbia, and (f) in respect of a transaction that is in part a lease of tangible personal property under which a person (in this paragraph referred to as the exhibitor ) is given the right or authority to exhibit a motion picture to others, the total consideration that (i) is paid by the exhibitor to the person with whom the exhibitor entered into the transaction, and (ii) is not otherwise included in this definition; "legal services" means (a) services that come within the meaning of the practice of law under the Legal Profession Act, (b) services described in section 18 of the Notaries Act, and (c) legally related services prescribed as legal services, but does not include services provided by a person to that person s employer in the course of employment; "lessee" means a person who leases tangible personal property (a) for the person s own use in British Columbia, (b) for use in British Columbia by another person at the first person s expense, or (c) on behalf of, or as the agent for, a principal who desires to lease the property for use in British Columbia by that principal or another person at the principal s expense; "lessor" means a person who, in the ordinary course of the person s business in British Columbia, leases tangible personal property to a lessee in British Columbia; "liquor" means liquor as defined in the Liquor Distribution Act; Page 9 of 105

10 "magazines" means printed and bound publications in a magazine format (a) that are issued at regular intervals each year by professional bodies, trade or industrial organizations, commercial publishing firms or non-profit corporations, and (b) where at least 10% of the content, determined in accordance with the regulations and in accordance with section 72 (2), is composed of technical, literary, editorial or pictorial content, other than advertising and promotional content, but does not include a prescribed type of publication; "manufactured home" means (a) a mobile home manufactured to Canadian Standards Association Standard Z240, (b) any other mobile home that is similar in design and construction to a mobile home constructed to Canadian Standards Association Standard Z240, (c) a modular home manufactured to Canadian Standards Association Standard A277, or (d) any other modular home built to a standard required by the National Building Code of Canada and qualifying for Canada Mortgage and Housing Corporation financing, if the unit or each module is in all essential features completely constructed prior to delivery from the factory; "mineral" means metal ore and every natural substance that can be mined and that (a) occurs in fragments or particles lying on, above or adjacent to the bedrock source from which it is derived, and is commonly described as talus, (b) is in the place or position in which it was originally formed or deposited, or (c) is loose, fragmentary or broken rock or float that, by decomposition or erosion of rock, is found in wash, loose earth, gravel or sand, and includes tailings, building and construction stone, marble, shale, clay, sand and gravel, but does not include petroleum, natural gas, volcanic ash, earth, soil, marl or peat; "mistake of law" includes any mistake that is not solely a mistake of fact; "motor vehicle" means motor vehicle as defined in the Motor Vehicle Act; "multijurisdictional vehicle" means a vehicle in respect of which tax is payable under section 29 (1); "newspapers" means printed and unbound publications in a newspaper format (a) that are published at regular intervals each year, and (b) where at least 20% of the content, determined in accordance with the regulations and in accordance with section 72 (2), is composed of editorials, news and articles of local or common interest, other than advertising and promotional content, but does not include a prescribed type of publication or advertising material known as flyers, or Page 10 of 105

11 advertising circulars, even if the flyers or advertising circulars are sold or given away as part of the newspaper; "park", in respect of a motor vehicle, does not include storage if the motor vehicle is stored for a period of more than 28 consecutive days; "parking period" means, in respect of a parking right, the period for which the parking right is purchased; "parking right" means the right to park a motor vehicle at a parking site for any period of time; "parking site" means any location in British Columbia at which a motor vehicle may, for a price or other consideration, be parked for any period of time; "passenger vehicle" means a motor vehicle designed primarily as a means of transport for individuals and includes vehicles prescribed as passenger vehicles; "periodicals" means printed and bound publications in a periodical format (a) that are issued at regular intervals each year by professional bodies, trade or industrial organizations, commercial publishing firms or non-profit corporations, and (b) where at least 10% of the content, determined in accordance with the regulations, and in accordance with section 72 (2), is composed of technical, literary, editorial or pictorial content, other than advertising and promotional content, but does not include a prescribed type of publication; "person" includes the government and a municipality; "promotional distribution" means the provision by a person to another person of tangible personal property that is provided for one or more of the following purposes: (a) to describe, promote or encourage the purchase, consumption or use of tangible personal property, services or real property; (b) to furnish or distribute to a person a catalogue, directory, listing or compilation of persons, places, prices, services, commodities or places of business in respect of the purchase, consumption or use of tangible personal property, services or real property; (c) a purpose, function or use prescribed by the Lieutenant Governor in Council as a promotional distribution; "promotional distributor" means a person who provides, by way of promotional distribution to another person, tangible personal property the purchase price of which (a) exceeds the amount of the payment specifically made for the tangible personal property by the person to whom it is provided, or (b) is not specifically charged to and required to be paid by the person to whom that tangible personal property is provided; "prototype" means the first full-scale functional form of a new type or a new construction of Page 11 of 105

12 tangible personal property, but does not include software or prescribed tangible personal property; "purchase price", (a) in relation to tangible personal property, means a price in money, and also the value of services rendered, the actual value of the tangible personal property exchanged, acquired or repossessed, and other consideration accepted by the seller or person from whom the property passes as price or on account of the price of the tangible personal property covered by the sale, and includes (i) any charges for (A) transportation and installation of the tangible personal property sold, or (B) interest, finance, service, customs and excise charges in relation to the tangible personal property sold that are incurred at or before the time that title to the tangible personal property covered by the sale passes under that sale, whether or not those charges are shown separately on the invoice recording the sale or in the seller s books, but does not include interest charges on a conditional sale contract if the amount of those charges is segregated on the invoice or bill of sale or is billed separately to the purchaser, and is payable over the term of the contract, (ii) if the tangible personal property is purchased, manufactured, processed or otherwise acquired outside British Columbia and subsequently brought or sent into or received in British Columbia for use or consumption in British Columbia, the costs and expenses (A) of and to the user for materials, labour and other manufacturing and processing costs and expenses, and (B) for service, customs, excise, transportation and other costs and expenses incurred by the user before the use of the tangible personal property in British Columbia, (iii) in relation to the purchase of ready-mixed concrete that is to be delivered by or on behalf of the vendor to the place where the purchaser intends to use it, the total consideration that is payable by the purchaser to have the ready-mixed concrete delivered to that place, and (iv) any charge, including a royalty or licence fee, relating to the use of the tangible personal property, or to the use of knowledge required to use the tangible personal property, whether incurred before or after the time that title to the tangible personal property covered by the sale passes under that sale, (b) in relation to legal services, means (i) the fees and charges, other than those prescribed as excluded, and (ii) the prescribed disbursements that are billed or otherwise charged to a purchaser for or in relation to the legal services, (c) in relation to a parking right, means a price in money, and also the value of services rendered, the actual value of the tangible personal property exchanged, Page 12 of 105

13 (d) (e) (f) (f.1) acquired or repossessed, and other consideration accepted by a seller of a parking right as price or on account of the price of the parking right, in relation to a taxable service, means a price in money, and also the value of services rendered, the actual value of the tangible personal property exchanged, acquired or repossessed, and other consideration accepted by a seller of a taxable service as price or on account of the price of the taxable service, and in relation to a telecommunication service, means the total consideration paid by the purchaser for the provision of the service and for each period in respect of which an invoice for or in relation to the service is issued, and includes (i) sign-up charges, (ii) access charges, (iii) airtime charges, (iv) usage charges, (v) service charges, and (vi) the following charges for telecommunications provided as part of the service: (A) in the case of a dedicated telecommunication service, all such charges; (B) in the case of any other telecommunication service, all such charges in respect of each telecommunication that meets at least 2 of the following criteria: (I) the telecommunication originates in British Columbia; (II) the telecommunication is received in British Columbia; (III) the charge for the telecommunication is invoiced with respect to a transmitter that is ordinarily situated in British Columbia; in relation to prescribed tangible personal property that is sold for a single price with tangible personal property or services that, under this Act, are not subject to tax or are exempt from tax, means the total consideration that is accepted by the seller for all the tangible personal property or services sold for the single price; in relation to tangible personal property, other than tangible personal property that is prescribed for the purposes of paragraph (f), that is subject to tax and is sold for a single price with tangible personal property or a service that, under this Act, is not subject to tax or is exempt from tax, means, (i) if the fair market value of the taxable tangible personal property is more than 90% of the single price and the single price is less than the prescribed amount, the total consideration that is accepted by the seller for all the tangible personal property or services sold for the single price, or (ii) in any other case, the fair market value of the taxable tangible personal property included in the single price, "purchaser" means (a) a person who acquires tangible personal property at a sale in British Columbia (i) for the person s own consumption or use, (ii) for consumption or use by another person at the expense of the person acquiring the property, or Page 13 of 105

14 (b) (c) (d) (e) (f) (iii) on behalf of or as agent for a principal, if the property is for consumption or use by the principal or by another person at the expense of that principal, a promotional distributor that does not come within paragraph (a), to the extent that the purchase price of the tangible personal property provided by way of promotional distribution exceeds the amount of the payment specifically made for it by the person to whom that property is provided, a person who agrees to pay or is otherwise obliged to pay consideration for legal services (i) provided to the person for the person s own benefit or use, (ii) provided to another recipient for that recipient s benefit or use at the person s expense, or (iii) provided to the person on behalf of or as agent for a principal, if the legal services are for the benefit or use of the principal or another person at the expense of that principal, a person who agrees to pay or is otherwise obliged to pay consideration for a parking right (i) provided to the person for the person s own benefit or use, (ii) provided to another recipient for that recipient s benefit or use at the person s expense, or (iii) provided to the person on behalf of or as agent for a principal, if the parking right is for the benefit or use of the principal or another person at the expense of that principal, a person who agrees to pay or is otherwise obliged to pay consideration for a taxable service (i) provided to the person for the person s own benefit or use, (ii) provided to another recipient for that recipient s benefit or use at the person s expense, or (iii) provided to the person on behalf of or as agent for a principal, if the taxable service is for the benefit or use of the principal or another person at the expense of that principal, and a person who agrees to pay or is otherwise obliged to pay consideration for a telecommunication service (i) provided to the person for the person s own use, (ii) provided to another recipient for that recipient s benefit or use at the person s expense, or (iii) provided to the person on behalf of or as agent for a principal, if the telecommunication service is for the benefit or use of the principal or another person at the expense of that principal; "retail sale" means a sale to a purchaser for purposes of consumption or use and not for resale; "sale" includes (a) a conditional sale, a transfer of title or possession, conditional or otherwise, a sale on credit or for which the price is payable by installments, an exchange, barter or any other contract by which, at a price or other consideration, a person Page 14 of 105

15 (b) (c) delivers tangible personal property to another person, a transfer of ownership of, title to or possession of tangible personal property (i) given as security, by foreclosure or by repossession under lien note or conditional sale contract, whether voluntary or otherwise, or by order of a court, or by any other means by which security may be realized, or (ii) in the process of winding up, liquidating or dissolving a corporation, and the provision, by way of promotional distribution, of tangible personal property, but does not include the provision of tangible personal property that, in accordance with the regulations, is merely incidental to a contract for the provision of services that are not subject to tax under this Act; "sale in bulk" means (a) a sale of tangible personal property by a vendor out of the usual course of the vendor s business, (b) a sale of substantially the entire stock of tangible personal property of a vendor, or (c) a sale of an interest in the business of a vendor; "software" means packaged or prewritten software programs or modifications to such programs, or the right to use such programs or modifications, whether the software is delivered by electronic, disk, tape or other means, but does not include (a) modifications that involve changes to the source code of software and that are made solely to meet the requirements of a specific person if (i) the purchase price or lease price, as applicable, of the modifications is separate from that of the unmodified software, and (ii) the purchase price or lease price of the modifications is greater than the purchase price or lease price, as applicable, of the software in its unmodified form, (b) software that is modified in a manner that involves changes to the source code, and that is modified solely to meet the requirements of a specific person if (i) the purchase price or lease price, as applicable, is for the software as modified, and (ii) that purchase price or lease price is greater than double what it would have been for the software in its unmodified form, or (c) custom software, being (i) software programs developed solely to meet the requirements of a specific person, and (ii) modifications to software referred to in subparagraph (i) when performed for the person for whom the software was originally developed, unless the software is a copy of software referred to in paragraph (a), (b) or (c), or the right to use such software, that is sold or leased to someone other than the specific person for whom the software was originally modified or developed; "tangible personal property" means (a) personal property that can be seen, weighed, measured, felt or touched, or that is in any other way perceptible to the senses, and includes natural or manufactured gas, Page 15 of 105

16 (b) (c) (d) software, electricity, and fixtures, other than prescribed types of fixtures; "tax" includes (a) all penalties and interest that are or may be added to tax under this Act, and (b) in the definition of collector and in sections 80, 81, 82 (1), 84, 91, 92, 93 (1), (1.1), (2) and (4), 94, 95, 99, 101 to 109, 111 to 117, 120, 123, 124, 125 and 128 to 138, except 137 (2), but not in any other provision of this Act, a levy under Division 9 of Part 2 and all penalties and interest that are or may be added to a levy under this Act; "taxable service" means any service provided to install, assemble, dismantle, repair, adjust, restore, recondition, refinish or maintain tangible personal property, but does not include a service (a) provided to install tangible personal property that will become real property on installation, (b) provided to install, assemble, dismantle, repair, adjust, restore, recondition, refinish or maintain prescribed tangible personal property, or (c) provided by a person to that person s employer in the course of employment; "telecommunication" includes any transmission, emission or reception of signs, signals, writing, images, sound or intelligence of any nature by wire, fibre optic cable, radio, satellite or other electromagnetic or laser based system, but does not include any prescribed transmission, emission or reception or any prescribed class of transmission, emission or reception; "telecommunication service" means the right, whether exercised or not, to send or receive one or more telecommunications by means of a transmitter that is ordinarily situated in British Columbia, and includes (a) the sending or receiving of a telecommunication by means of a transmitter that is ordinarily situated in British Columbia, and (b) a dedicated telecommunication service; "trailer" means trailer as defined in the Motor Vehicle Act; "transfer of possession" includes transactions held by the commissioner to be in place of a transfer of title, exchange or barter; "transmitter" means a facility or instrument by which a purchaser of a telecommunication service may send or receive the telecommunications that may be sent or received under that service, and includes a telephone, facsimile machine, modem and television; "use" includes (a) the exercise of any right or power over tangible personal property incidental to the ownership of it other than the sale of the property, (b) the leasing by a person of tangible personal property to another person, (c) the storing, keeping or retaining of tangible personal property for any purpose, Page 16 of 105

17 (d) (e) (e.1) the provision of tangible personal property by way of promotional distribution, as well as the use of it by the person to whom the tangible personal property is provided, in the definition of user for the purposes of sections 9 (1) and 11 (1) (b), the employment or utilization of tangible personal property by its owner, an employee of that owner or an independent contractor retained by that owner, in the course of carrying out work or performing services for another person, and the consumption, employment or utilization of tangible personal property by a business in the course of delivering a service, except that use does not include (f) (g) (h) (i) the exercising of a right or power over or the storing, keeping or retaining of tangible personal property that was brought into British Columbia for the sole purpose of subsequently transporting it out of British Columbia for use outside British Columbia, the exercising of a right or power over or the storing, keeping or retaining of tangible personal property, other than reusable containers referred to in section 8, that was brought into British Columbia for the sole purpose of being processed, fabricated or manufactured into, or attached to or incorporated into, other tangible personal property that is to be transported outside British Columbia for use solely outside British Columbia, the storing, keeping or retaining of tangible personal property that was brought into British Columbia for the sole purpose of being repaired and, after repair, being transported outside British Columbia for use outside British Columbia, and the storing, keeping or retaining of tangible personal property for the sole purpose of resale; "user" means a person who utilizes in British Columbia tangible personal property (a) for the person s own consumption or use, (b) for the consumption or use of another person at the first person s expense, or (c) on behalf of, or as the agent for, a principal who desires to acquire such property for the consumption or use by the principal or another person at the principal s expense, and includes a promotional distributor to the extent that the purchase price of the tangible personal property provided by way of promotional distribution exceeds the amount of the payment specifically made for the tangible personal property by the person to whom the tangible personal property is provided; "vehicle" means vehicle as defined in the Motor Vehicle Act; "vendor" means a person, including an assignee, liquidator, administrator, receiver, receiver manager, trustee or similar person, who, in the ordinary course of the person s business, in British Columbia, sells tangible personal property to a purchaser at a retail sale in British Columbia. Page 17 of 105

18 B.C. Reg. 23/98; ; ; ; ; ; ; Proof of residence in British Columbia 2. For the purposes of this Act, any of the following is proof, in the absence of evidence to the contrary, that an individual resides in British Columbia: (a) the receipt by the individual of a grant under section 2 of the Home Owner Grant Act; (b) the receipt by a person of a grant in respect of the individual s residence and for the individual s benefit under section 3, 4 or 5 of the Home Owner Grant Act; (c) the enrollment of the individual as a beneficiary under the medical services plan continued under the Medicare Protection Act. Deputy commissioners 3. The commissioner may appoint an employee of the government as a deputy commissioner and may delegate to a deputy commissioner any of the duties and powers exercisable by the commissioner under this Act. Demand for information 3.1 (1.) For any purpose related to the administration or enforcement of this Act or the regulations, the commissioner or a person authorized by the commissioner may, by demand notice, require from any person (a) a return, (b) any information or additional information, (c) the production of any records, or (d) a written statement. (2.) A demand notice under subsection (1) (a) must be delivered to the person by personal service, registered mail, electronic mail or fax, (b) must specify a reasonable time by which the person must comply with the demand notice, and (c) in relation to a requirement under subsection (1) (d), may require the written statement to be made by way of affidavit or statutory declaration. (3.) A person to whom a demand notice is delivered under this section must comply with the notice within the time specified in the notice. (4.) Under this Act, an affidavit by the commissioner, or the authorized person referred to in subsection (1), in which are stated the facts necessary to establish (a) compliance by the commissioner or authorized person with this section, or (b) default by a person on whom a demand was made under this section must be admitted as evidence in any court and is proof, in the absence of evidence to the contrary, of the facts stated Confidentiality 4. A person who has custody of or control over information or records under this Act must not disclose the information or records to any other person except as follows: Page 18 of 105

19 (a) (b) (c) (d) (e) in the course of administering or enforcing this or another taxation Act; in court proceedings relating to this or another taxation Act; as provided in, or ordered under, section 39 (3), 40 (1), 99 (5) or 100 (1) of the Family Relations Act or section 8 (3) or 9 (2) of the Family Maintenance Enforcement Act; under an agreement that (i) is between the government and another government, (ii) relates to the administration or enforcement of taxation enactments, and (iii) provides for the disclosure of information and records to and the exchange of similar information and records with that other government; for the purpose of compiling statistical information by the government or the government of Canada. Valuation of purchase price, lease price or fair market value 4.1 The commissioner may make a valuation of the purchase price, lease price or fair market value of tangible personal property or a taxable service that (a) passes at a sale or lease, or (b) is brought or sent into British Columbia, or is delivered in British Columbia, and the purchase price, lease price or fair market value for the purpose of taxation under this Act is as determined by the commissioner Page 19 of 105

20 PART 2 - Imposition of Tax Part 2: Division 1 Tax in relation to Purchase and Use-- Sections 5-10 of Part 2, Division 1 -- Provincial sales tax 5. (1.) At the time of making a purchase, the purchaser must pay to the government a tax at the applicable rate under section 6. (2.) If a person sells tangible personal property at a retail sale in British Columbia to a person who alleges that the tangible personal property is not being purchased for consumption or use, the seller must nevertheless require the other person to pay the tax, but the payment must be refunded by the commissioner on receipt of satisfactory evidence that the tax was wrongly paid. (3.) A purchaser who, after March 30, 1998, pays or is liable to pay a charge described in paragraph (a) (iv) of the definition of purchase price in respect of tangible personal property purchased by that purchaser must, unless the charge was included or reflected in the purchase price of the tangible personal property at the time of its purchase, pay to the government a tax in respect of the charge at the applicable rate under section 6, whether or not (a) the purchase of the tangible personal property occurred before March 31, 1998, or (b) more than 6 years have elapsed since the date of the purchase of the tangible personal property. (4.) The tax under subsection (3) must be calculated separately for each charge and must be paid at the earlier of (a) the time each charge is paid, and (b) the time each charge becomes payable ; Rates of tax 6. (1.) Subject to subsections (2), (3) and (5), the rate of the tax payable under section 5 (1) is 7.5% of the purchase price of the tangible personal property. (2.) Despite any other provision of this Division, the rate of the tax payable under sections 5 (1) and 11 (3) on liquor is 10% of the purchase price. (3.) Despite any other provision of this Division but subject to subsection (4), the rate of the tax payable under sections 5 (1) and 11 (3) on a passenger vehicle is as follows: (a) 7.5% of the purchase price of the passenger vehicle, if the purchase price is less than $47 000; (b) 8% of the purchase price of the passenger vehicle, if the purchase price is $ or more but less than $48 000; (c) 9% of the purchase price of the passenger vehicle, if the purchase price is $ or more but less than $49 000; (d) 10% of the purchase price of the passenger vehicle, if the purchase price is $ or more. (4.) If a passenger vehicle qualifies under the regulations as an alternative fuel vehicle, the Page 20 of 105

21 applicable tax rate established under subsection (3) must be determined in accordance with the regulations. (4.1) Despite any other provision of this Division, the tax payable under sections 5(1), 11 and 16 on a manufactured home is the rate established under subsection (1) of this section applied to the prescribed percentage of the purchase price, or if section 11(4.1) applies, the fair market value, of the manufactured home, if the manufactured home (a) is a mobile home referred to in paragraph (a) or (b) of the definition of "manufactured home" in section 1, and (b) is designed for, and will be used as, a family residential dwelling unit. (4.2) Despite any other provision of this Division, the tax payable under sections 5 (1), 11 and 16 on a manufactured home is the rate established under subsection (1) of this section applied to a prescribed percentage of the purchase price, or if section 11(4.1) applies, the fair market value, of the manufactured home, if the manufactured home (a) is a modular home referred to in paragraph (c) or (d) of the definition of "manufactured home" in section 1, and (b) is designed for, and will be used as, a family residential dwelling unit. (4.3) For the purpose of subsections (4.1) and (4.2), "family residential dwelling unit" does not include (a) a recreational vehicle or a component such as a travel trailer, including a Park Model travel trailer manufactured to Canadian Standards Association Standard Z240, a tent trailer, a motor home, a slide-on camper, a chassis mounted camper or another vehicle or component of the same general classes, or (b) a prescribed structure, vehicle or component used for a prescribed purpose. (4.4) Subsections (4.1) and (4.2) do not apply to the following: (a) free standing appliances, free standing furniture and draperies sold with a manufactured home; (b) repair parts purchased for a manufactured home; (c) taxable services provided in respect of a manufactured home. (4.5) Not yet in force. (5.) Despite any other provision of this Division, the rate of the tax payable under sections 5 (1) and 11 (3) on propane that is taxable under this Act is the rate established under the Motor Fuel Tax Act in respect of propane that is subject to tax under that Act ; ; ; ; Liquor sold under special occasion licence 7. (1.) If liquor is acquired for sale under a special occasion licence, the holder of that licence or the agent of the holder must, at the time the licence is purchased, (a) inform the authorized branch representative of the amount of the total proceeds expected from the sale of the liquor at the special occasion, and (b) pay to that representative an amount equal to the additional tax that would be collectable under this Act based on the expected proceeds of the sales. (2.) If the amount of tax collectable on the actual sale of the liquor in respect of which payment was made under subsection (1) is less than the amount of the payment under subsection (1), the commissioner may refund the amount of the difference out of the consolidated revenue fund. Page 21 of 105

22 Reusable containers 8. Without limiting sections 5 and 11 but subject to the regulations, a person who (a) purchases, or (b) brings or sends into British Columbia, or receives delivery of in British Columbia, containers in which to package or deliver a product the person intends to sell must pay tax in accordance with this Division, if the containers are capable of being returned and reused Tax if use of property changes 9. (1.) Subject to sections 11 (3) and 20 to 24, a person who (a) acquired, inside or outside British Columbia, tangible personal property on which tax was not payable under this Act, other than by reason of an exemption under sections 69 to 77, and (b) becomes, for any period, a user of that property is deemed, at the time the person becomes a user, to be a purchaser of that property and must pay tax on the purchase price of that property at the rate in section 6 (1). (1.1) Subject to section 11 (3), a person who (a) acquired, inside or outside British Columbia, tangible personal property that is exempt under this Act or the regulations, and (b) subsequently uses that property or allows that property to be used for a purpose other than that which allowed the person to acquire or use the property exempt from tax under the Act or the regulations must, at the time the property is so used, pay tax on the purchase price of that property at the rate under this Act. (2.) If a person who is a bona fide farmer, aquaculturist or commercial fisher uses or permits tangible personal property (a) prescribed under section 73 (b) or (c), or (b) referred to in section 73 (d), to be used for a use other than that which allowed the person to obtain the property exempt from tax under these sections, at the time the property is so used, the person must pay tax on the purchase price of that property at the rate under this Act. (3.) A person (a) who acquired tangible personal property exempt from tax under section 76 (1) (d) or (d.1), and (b) who, for any period after the testing of the prototype or copy of that prototype referred to under section 76 (1) (d) or (d.1), (i) becomes the user of that prototype or copy of that prototype, or (ii) receives consideration for use of that prototype or copy of that prototype, must pay tax on the purchase price of that tangible personal property at the rate in section 6 (1). (3.1) If, subsequent to the acquisition or lease of tangible personal property in respect of which a person, as that term is defined in section 82.1 (1), received a refund of tax under that section, the person uses the property for a use other than that which would entitle the person to receive a refund under section 82.1, the person must, at the time the property is so used, pay tax on the purchase price or lease price, as the case may be, of that property at the rate under this Act. Page 22 of 105