British Columbia (BC) has issued a revised Provincial Sales Tax Bulletin PST 116: Motor Vehicle Dealers and Leasing Companies. This bulletin addresses various transactions that might be undertaken by these Companies and the applicability of the BC PST. The majority of the Bulletin is rewording of existing administrative policies followed by BC with respect to sales tax on various motor vehicle transactions.
The one notable addition is a section on when a motor vehicle purchased or leased by a First Nations Consumer would be exempt of PST and the documentary requirements that must be met in order to sell or lease a vehicle on a PST exempt basis. Motor vehicles must be delivered on First Nations Land in order to qualify for a PST exemption. Proof of delivery to First Nations Land must be retained by dealers and leasing companies. Documents that would be considered acceptable are;
- A written contract between the dealer/leasing company and the purchaser that specifically states that title transfers on First Nations land.
- A written letter stating that the dealer/leasing company delivered the vehicle to a location on First Nations land.
All of the following information must be included in the letter:
- A statement that the vehicle was delivered to First Nations land
- The date and time of the delivery
- The delivery address
- The signature of the salesperson (or other employee) who delivered the vehicle
- The signature of the purchaser(s)
The Bulletin also clarifies that a photo of the vehicle on reserve land is generally not sufficient evidence to show that title passed on First Nation Land. If you would like to read the whole Bulletin, it can be found [here].