1992 Legislative Session: 1st Session, 35th Parliament
FIRST READING


The following electronic version is for informational purposes only.
The printed version remains the official version.


MINISTER OF FINANCE AND
CORPORATE RELATIONS

BILL 69 -- 1992

TAXATION STATUTES AMENDMENT ACT, 1992

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of British Columbia, enacts as follows:

 
Hotel Room Tax Act

1 Section 1 of the Hotel Room Tax Act, R.S.B.C. 1979, c. 183, is amended by adding the following definition:

"mistake of law" includes any mistake that is not solely a mistake of fact; .

2 Section 16.1 is amended

(a) in subsection (1) by adding the following:

"associated corporation" means a corporation that is associated with another corporation within the meaning of section 256 of the Income Tax Act (Canada);

"property", when referring to the property of an "associated corporation" or a "related individual", means property that is used in, or in conjunction with, the business in respect of which the taxes referred to in subsection (2) are required to be collected and remitted;

"related individual" has the same meaning as in the Property Purchase Tax Act; ,

(b) in subsection (2) by repealing paragraphs (a) and (b) and substituting the following:

(a) against the real property of

(i) the person,

(ii) an associated corporation of the person, or

(iii) a related individual of the person

by registering a certificate of indebtedness in the prescribed form in the appropriate land title office in the same manner that a charge is registered under the Land Title Act, and

(b) against the personal property of

(i) the person,

(ii) an associated corporation of the person, or

(iii) a related individual of the person

by designating the amount owing as a lien and entering the amount together with the date of the entry in an accounts receivable system maintained by the director. , and

(c) in subsection (4) by striking out "all".

 
Motor Fuel Tax Act

3 Section 1 of the Motor Fuel Tax Act, S.B.C. 1985, c. 76, is amended by adding the following definition:

"mistake of law" includes any mistake that is not solely a mistake of fact; .

4 Section 30 is repealed and the following substituted:

Inspection and audit powers

30 (1) Except as limited by subsection (3), the director may enter at any reasonable time the business premises occupied by a person, or the premises where the records of the person are kept, in order to

(a) determine whether this Act and the regulations are being or have been complied with,

(b) inspect, audit and examine books of account or other records, or

(c) ascertain the quantities of fuel sold, stored, used or coloured by the person.

(2) A person occupying premises referred to in subsection (1) shall produce all books of account or other records as may be required by the director and shall answer all questions of the director regarding the matters referred to in that subsection.

(3) The power to enter a place under subsection (1) shall not be used to enter a dwelling occupied as a residence without the consent of the occupier except under the authority of a warrant under subsection (4).

(4) On being satisfied by evidence on oath that there are in a place records or other things for which there are reasonable grounds to believe that they are relevant to the matters referred to in subsection (1), a justice may issue a warrant authorizing a person named in the warrant to enter the place in accordance with the warrant in order to exercise the powers referred to in subsection (1) (a) to (c).

(5) When required by the director, a person shall provide to the director all books of account and other records that the director considers necessary to determine whether this Act and the regulations are being or have been complied with.

(6) No person shall

(a) hinder, molest or interfere with a person doing anything that the person is authorized to do under this section, or

(b) prevent or attempt to prevent a person from doing anything that the person is authorized to do under this section.

5 Section 49 is repealed and the following substituted:

Application for injunction

49 If a person sells or offers to sell fuel in the Province, the minister may apply to the Supreme Court for an injunction ordering the person to cease selling or offering to sell fuel until the person complies with this Act and the regulations and the person's obligations under this Act are fulfilled.

6 Section 53 is amended

(a) in subsection (1) by striking out "30 (2)" and substituting "30 (2), (5) or (6)", and

(b) in subsection (3) by adding the following paragraph:

(c.1) has wilfully, in any manner, failed to comply with this Act or the regulations, .

7 Section 60 (1) is amended

(a) by adding the following paragraph:

(c.1) establishing a system of permits for retail dealers, wholesale dealers and vendors who sell fuel that is not taxable under this Act and, in relation to this,

(i) prohibit these dealers and vendors from acquiring and selling fuel in the Province unless authorized by a permit,

(ii) prohibit persons from selling fuel to these dealers and vendors unless the dealer or vendor is authorized to sell the fuel by a permit,

(iii) prescribing different requirements, limits and conditions in relation to different classes of permits for retail dealers, for wholesale dealers and for vendors, and

(iv) providing for the issue, refusal to issue, suspension and cancellation by the director of the permits, , and

(b) by repealing paragraph (d) (i) and substituting the following:

(i) registered consumer certificates, .

 
School Act

8 The School Act, S.B.C. 1989, c. 61, is amended by adding the following section:

Adjustments

136.1 Where the net taxable values of land and improvements are adjusted, or a supplementary assessment roll is prepared under the Assessment Act in respect of which section 409 (6) of the Municipal Act applies, amounts to be raised by taxation in each school district may be adjusted in the current taxation year or a subsequent taxation year in the manner directed by the Minister of Finance and Corporate Relations.

9 Section 139 (8) is amended by striking out "A municipality may deduct," and substituting "Subject to section 139.1 (5), a municipality may deduct,".

10 The following sections are added:

Interest on unpaid taxes

139.1 (1) In this section "unpaid taxes" means any school taxes, penalties and interest that a municipality is required to pay to the Minister of Finance and Corporate Relations under section 139 that have not been paid as required by this Act or by the regulations.

(2) A municipality shall pay interest on its unpaid taxes to the Minister of Finance and Corporate Relations.

(3) Interest payable under subsection (2) shall be calculated at the rate prescribed by the Lieutenant Governor in Council and shall be payable on each amount of school taxes, penalties or interest included in the unpaid taxes from the date on which the amount was to be paid to the Minister of Finance and Corporate Relations under this Act or the regulations to the date that the amount is received by the Minister of Finance and Corporate Relations.

(4) The Minister of Finance and Corporate Relations may give notice to a municipality of

(a) the municipality's unpaid taxes,

(b) any interest that is payable on the unpaid taxes under this section,

(c) the date by which payment of the unpaid taxes and the interest is required, and

(d) the Minister of Finance and Corporate Relations' powers under subsection (5) if that payment is not made as required.

(5) Where a municipality to which a notice is sent under subsection (4) does not pay the unpaid taxes and the interest referred to in the notice by the date required in the notice, the Minister of Finance and Corporate Relations may disallow all or part of the administration fee to which the municipality would otherwise be entitled under section 139 (8).

Inspection

139.2 (1) For the purpose of ensuring compliance with this Part and the regulations related to Divisions 3 and 4 of this Part, the Surveyor of Taxes or a person authorized in writing by the Surveyor of Taxes may

(a) at any reasonable time enter the premises where one or more of the records of a municipality are kept,

(b) request production of records or things that may be relevant to the inspection, and

(c) inspect records or things relevant to the inspection.

(2) Subsection (1) (a) does not authorize entry to a room actually used as a dwelling without the consent of the occupier.

(3) The person conducting an inspection under this section is entitled to free access to all of the records of every description of the municipality referred to in subsection (1) (a) that touch on any of the matters in respect of which an inspection may be conducted under this section.

(4) A person who removes records or things under subsection (1) (c) shall return them within a reasonable time.

 
Social Service Tax Act

11 Section 1 (1) of the Social Service Tax Act, R.S.B.C. 1979, c. 388, is amended

(a) by repealing the definition of "commissioner" and substituting the following:

"commissioner" means the person appointed by the Lieutenant Governor in Council to administer this Act; ,

(b) by repealing the definition of ' "consumption" or "use" ',

(c) by adding the following definition:

"mistake of law" includes any mistake that is not solely a mistake of fact; ,

(d) in the definition of "promotional distributor" by striking out "to a person in the Province," and substituting "to a person,", and

(e) by repealing the definition of "use" and substituting the following:

"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 at a retail sale,

(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,

(d) 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 so provided,

except that use does not include

(e) the exercising of a right or power over or the storing, keeping or retaining of tangible personal property that was brought into the Province for the sole purpose of subsequently transporting it out of the Province for use outside the Province,

(f) the exercising of a right or power over or the storing, keeping or retaining of tangible personal property that was brought into the Province 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 the Province for use solely outside the Province,

(g) the storing, keeping or retaining of tangible personal property that was brought into the Province for the sole purpose of being repaired and, after repair, being transported outside the Province for use outside the Province, and

(h) the storing, keeping or retaining of tangible personal property for the sole purpose of resale; .

12 The following section is added:

Deputy commissioners

1.1 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.

13 The following section is added:

Tax on services related to purchase

2.02 (1) If a purchaser

(a) acquires tangible personal property

(i) from another person, or

(ii) through another person acting as agent of the purchaser, and

(b) within 6 months before or after acquiring the tangible personal property, enters into a contract with the other person or an associate of the person under which the original tangible personal property referred to in paragraph (a) is processed, fabricated or manufactured into, or attached to or incorporated into, other tangible personal property by that other person or associate,

the purchaser shall pay to Her Majesty in right of the Province, in addition to tax payable on the original tangible personal property but subject to subsection (2), tax at the rate of 6% of all amounts payable under the contract for or in relation to the resulting tangible personal property.

(2) Tax is not payable under subsection (1) if the purchaser satisfies the commissioner that, at the time the tangible personal property referred to in subsection (1) (a) was acquired, the purchaser did not have an intention to enter into the contract referred to in subsection (1) (b).

(3) In cases to which subsection (1) does not apply, if a purchaser of tangible personal property enters into an agreement with the seller of the property or an associate of the seller

(a) that is

(i) part of the contract to acquire the tangible personal property, or

(ii) a separate contract entered into within 2 days before or after entering into the contract to acquire the tangible personal property, and

(b) under which the seller or an associate of the seller is to modify or process the tangible personal property,

the purchaser shall pay to Her Majesty in right of the Province tax at the rate of 6% of all amounts payable under the contract for or in relation to the modification or processing.

(4) Tax is not payable under subsection (1) or (3) on that portion of the amounts payable under the contract for tangible personal property on which tax is otherwise payable by the purchaser under this Act.

(5) Tax under subsection (1) or (3) shall be paid, in respect of each amount payable under the contract, by the date on which the amount is paid or payable, whichever is earlier.

(6) This section does not apply if the tangible personal property in its resulting form after completion of the contract referred to in subsection (1) or (3) would be exempt from tax under this Act.

(7) If a person referred to in section 2 (3.4) uses or permits tangible personal property prescribed under section 4 (1) (c) or (c.1) or referred to in section 4 (1) (d) to be used for a use other than that which permitted subsection (6) to apply, the person shall pay to Her Majesty in right of the Province at the time the property is so used tax at the rate then in effect under this section on the amounts on which tax would have been payable under this section but for subsection (6).

(8) For the purposes of this Act, other than section 2,

(a) the matters for which an amount referred to in subsection (1) or (3) of this section is payable are deemed to be a sale of tangible personal property at a retail sale,

(b) an amount referred to in paragraph (a) of this subsection is deemed to be a purchase price, and

(c) the person with whom the purchaser enters into a contract referred to in subsection (1) or (3) is deemed to be a vendor in relation to the matters referred to in paragraph (a).

14 Section 7 (1.1) is repealed and the following substituted:

(1.1) The tax imposed by section 2.01 or 2.02, whether the purchase price is payable in cash, on terms, by instalments or otherwise,

(a) shall be collected at the time that purchase price is paid or payable, whichever is earlier, and

(b) shall be remitted to the commissioner at the prescribed times and in the prescribed manner.

15 Section 18.1 is amended

(a) in subsection (1) by adding the following:

"associated corporation" means a corporation that is associated with another corporation within the meaning of section 256 of the Income Tax Act (Canada);

"property", when referring to the property of an "associated corporation" or a "related individual", means property that is used in, or in conjunction with, the business in respect of which the taxes referred to in subsection (2) are required to be collected and remitted;

"related individual" has the same meaning as in the Property Purchase Tax Act; ,

(b) in subsection (2) by repealing paragraphs (a) and (b) and substituting the following:

(a) against the real property of

(i) the person,

(ii) an associated corporation of the person, or

(iii) a related individual of the person by registering a certificate of indebtedness in the prescribed form in the appropriate land title office in the same manner that a charge is registered under the Land Title Act, and

(b) against the personal property of

(i) the person,

(ii) an associated corporation of the person, or

(iii) a related individual of the person

by designating the amount owing as a lien and entering the amount together with the date of the entry in an accounts receivable system maintained by the commissioner. , and

(c) in subsection (4) by striking out "all".

16 Section 27 is amended

(a) by repealing subsection (1), and

(b) in subsection (2) by striking out "the inspection," and substituting "an inspection,".

17 The following section is added:

Inspection and audit powers

27.1 (1) The commissioner may appoint persons for the purposes of this section.

(2) Except as limited by subsection (4), a person appointed under subsection (1) may enter at any reasonable time the business premises occupied by a person, or the premises where the records of the person are kept, in order to

(a) determine whether this Act and the regulations are being or have been complied with,

(b) inspect, audit and examine books of account or other records, or

(c) ascertain the quantities of tangible personal property on hand or sold or leased by the person.

(3) A person occupying premises referred to in subsection (2) shall produce all books of account or other records as may be required by a person appointed under subsection (1) for the purposes of that subsection and shall answer all questions of that person regarding the matters referred to in that subsection.

(4) The power to enter a place under subsection (2) shall not be used to enter a dwelling occupied as a residence without the consent of the occupier except under the authority of a warrant under subsection (5).

(5) On being satisfied by evidence on oath that there are in a place records or other things for which there are reasonable grounds to believe that they are relevant to the matters referred to in subsection (2), a justice may issue a warrant authorizing a person named in the warrant to enter the place in accordance with the warrant in order to exercise the powers referred to in subsection (2) (a) to (c).

(6) No person shall

(a) hinder, molest or interfere with a person doing anything that the person is authorized to do under this section, or

(b) prevent or attempt to prevent a person from doing anything that the person is authorized to do under this section.

18 Section 33 is amended

(a) in subsection (1.1) by adding "27.1," after "10, 17,", and

(b) in subsection (2.1) by adding the following paragraph:

(c.1) has wilfully, in any manner, failed to comply with this Act or the regulations, .

19 Section 33 (1.1) is amended by adding "2.02," after "2.01,".

20 Section 37 (2) (c.1) is amended by adding "2.02," after "2.01,".

 
Tobacco Tax Act

21 Section 1 of the Tobacco Tax Act, R.S.B.C. 1979, c. 404, is amended

(a) by repealing the definition of "collector" and substituting the following:

"collector" means a dealer who is appointed by the director to act as agent of the minister to collect the tax imposed by this Act; ,

(b) by adding the following definition:

"dealer's permit" means a permit issued under section 4.1; , and

(c) by adding the following definition:

"mistake of law" includes any mistake that is not solely a mistake of fact; .

22 Section 4 is repealed and the following substituted:

Prohibitions against selling tobacco without permit

4 (1) No person shall sell or offer to sell tobacco at retail in the Province unless authorized to sell tobacco at retail by a dealer's permit or by regulation.

(2) No person shall sell or offer to sell tobacco at wholesale in the Province unless authorized to sell tobacco at wholesale by a dealer's permit.

(3) No person shall sell or offer to sell in the Province tobacco for resale to any person who is not authorized to sell tobacco by a dealer's permit or by regulation.

(4) Unless authorized by the director, no person shall acquire in the Province tobacco for resale except from a person who holds a dealer's permit to sell tobacco at wholesale.

(5) No person shall participate or acquiesce in a contravention of this section.

Dealer's permits

4.1 (1) The director may issue, at the director's discretion but subject to the regulations, a dealer's permit authorizing a person to sell tobacco at retail, at wholesale or at both.

(2) A dealer's permit shall not be transferable.

(3) The person issued a dealer's permit shall

(a) keep the permit at the person's principal place of business in the Province, and

(b) present the permit for inspection when requested to do so by the director, by a person designated by the director or by a person within a class of persons designated by the director.

Refusal, suspension and cancellation of dealer's permits

4.2 (1) If the director refuses to issue a dealer's permit, the director shall provide written reasons to the applicant for the permit.

(2) If satisfied that a person has not complied with this Act or the regulations, the director may suspend the person's dealer's permit or authorization under section 31 (1) (h) for a period of up to 30 days without advance notice to the person.

(3) If satisfied that a person has not complied with this Act or the regulations, the director may cancel the person's dealer's permit or authorization under section 31 (1) (h).

(4) Before exercising the power under subsection (3), the director shall deliver written notice of the proposed cancellation and the reasons for it to the person and shall give the person an opportunity to show why the dealer's permit or authorization should not be cancelled.

(5) A person who has been refused a dealer's permit, or whose permit or authorization has been suspended or cancelled, may appeal the director's decision in accordance with section 10.

23 The following section is added:

Inspection and audit powers

8.5 (1) The director may appoint persons for the purposes of this section.

(2) Except as limited by subsection (4), a person appointed under subsection (1) may enter at any reasonable time the business premises occupied by a person, or the premises where the records of the person are kept, in order to

(a) determine whether this Act and the regulations are being or have been complied with,

(b) inspect, audit and examine books of account or other records, or

(c) ascertain the quantities of tobacco on hand, used or sold by the person.

(3) A person occupying premises referred to in subsection (2) shall produce all books of account or other records as may be required by a person appointed under subsection (1) and shall answer all questions of that person regarding the matters referred to in subsection (2).

(4) The power to enter a place under subsection (2) shall not be used to enter a dwelling occupied as a residence without the consent of the occupier except under the authority of a warrant under subsection (5).

(5) On being satisfied by evidence on oath that there are in a place records or other things for which there are reasonable grounds to believe that they are relevant to the matters referred to in subsection (2), a justice may issue a warrant authorizing a person named in the warrant to enter the place in accordance with the warrant in order to exercise the powers referred to in subsection (2) (a) to (c).

(6) When required by the director, a dealer shall provide to the director or a person appointed under subsection (1) all books of account and other records that the director considers necessary to determine whether this Act and the regulations are being or have been complied with.

(7) No person shall

(a) hinder, molest or interfere with a person doing anything that the person is authorized to do under this section, or

(b) prevent or attempt to prevent a person from doing anything that the person is authorized to do under this section.

24 Section 9 is amended

(a) by repealing subsection (1),

(b) by repealing subsection (2) and substituting the following:

(2) If, on the basis of an inspection, audit or examination under section 8.5 or on the basis of other information, it appears that a person has not complied with this Act or the regulations, the official acting under that section shall calculate the tax collected or due in a manner and by a procedure the director considers adequate and expedient, and the director shall assess the person for the amount of tax calculated. ,

(c) in subsection (2.1) by striking out "an inspection, audit or examination under subsection (1)," and substituting "an inspection, audit or examination under section 8.5,", and

(d) by adding the following subsection:

(4) A person assessed under subsection (2) may appeal the assessment in accordance with section 10.

25 Section 10 is amended

(a) in subsection (1) by adding the following paragraph:

(b.1) a decision of the director under section 4.1 to refuse to issue a dealer's permit or a decision of the director under section 4.2 to suspend or cancel a person's authorization to sell tobacco, , and

(b) by repealing subsection (4) and substituting the following:

(4) On receipt of the notice of appeal, the minister shall

(a) consider the matter and confirm, reverse or vary the estimate, assessment, penalty or decision from which the appeal is made, and

(b) promptly notify the person who brought the appeal of the minister's decision in the matter.

26 Section 20 is repealed and the following substituted:

Application for injunction

20 If a dealer sells or offers to sell tobacco in the Province and is not authorized under this Act to do so, the minister may apply to the Supreme Court for an injunction ordering the dealer to cease selling or offering to sell tobacco until the dealer's obligations under this Act are fulfilled and the dealer pays the costs of the application.

27 Section 27 is amended

(a) in subsection (1.1) by striking out "section 2, 3, 4, 5, 5.1 (1) or 14" and substituting "section 2, 3, 4.1, 5, 5.1 (1), 8.5 (3), (6) or (7) or 14",

(b) by repealing subsection (2.2) (a) and substituting the following:

(a) contravenes section 4, , and

(c) in subsection (2.2) by adding the following paragraph:

(d.1) has wilfully, in any manner, failed to comply with this Act or the regulations, .

28 Section 28 is amended by renumbering the section as section 28 (1) and by adding the following subsection:

(2) In a prosecution brought against a person who is a dealer, the person's application form for a dealer's permit is evidence that the person charged is a dealer, and the person's completed return form is evidence that the person charged collected tax.

29 Section 30 is repealed.

30 Section 31 (1) is amended

(a) by striking out "including, without limiting the generality of the foregoing, regulations" and substituting "including, without limiting the generality of the foregoing, regulations to do one or more of the following:", and

(b) by repealing paragraphs (g) and (h) and substituting the following:

(g) establishing classes of dealer's permits and prescribing different requirements, limits and conditions for each class of dealer's permits;

(h) prescribing classes of persons as persons authorized to sell tobacco at retail, subject to a suspension or cancellation under section 4.2, and establishing limits or conditions on this authorization;

(i) establishing a marking system for the purpose of proving that tax under this Act has been accounted for and, in relation to the system, prohibiting the possession, purchase or sale of tobacco except in accordance with the system.

Transitional regulations

31 A regulation under section 31 (1) (g) of the Tobacco Tax Act, as enacted by this Act, made before September 30, 1992 may be made retroactive to the date on which that section comes into force or to any date after that date and, if made retroactive, shall be deemed to have come into force on the date specified in the regulation.

Transition

32 Section 2.02 of the Social Service Tax Act, as enacted by section 13 of this Act, does not apply to written contracts entered into before the day on which this Act receives First Reading in the Legislative Assembly.

Validation

33 (1) Notwithstanding anything in the Social Service Tax Act, any predecessor Act or any other enactment that is now or was previously in force, every appointment or other employment of a commissioner or deputy commissioner under the Social Service Tax Act or any predecessor Act is confirmed and validated from the date that the persons appointed to or otherwise employed in those positions assumed those positions, whether or not the appointments or other employments were valid and effective at the time that they were made or arranged.

(2) Without limiting subsection (1), any duties or powers delegated to or conferred on a deputy commissioner under the Social Service Tax Act or any predecessor Act before the coming into force of this section by the Lieutenant Governor in Council, by a minister charged with the administration of the Social Service Tax Act or any predecessor Act or by a commissioner, are deemed to have been validly delegated to or conferred on that deputy commissioner and the authority of that deputy commissioner to perform those duties and to exercise those powers is confirmed and validated.

Commencement

34 (1) Sections 13, 14, 19, 20, 21 (b), 22, 25 (a) and 30 shall be deemed to have come into force on the date this Act was given First Reading in the Legislative Assembly and are retroactive to the extent necessary to give them effect on and after that date.

(2) Sections 11 (a) and 12 are retroactive to the extent necessary to give full force and effect to their provisions and shall not be construed as lacking retroactive effect in relation to any matter by reason that they make no specific reference to that matter.

(3) Section 11 (c) shall be deemed to have come into force on April 22, 1986, is retroactive to the extent necessary to give it effect on and after that date and applies to any mistake that occurred on or after that date.

(4) Sections 1, 3 and 21 (c) shall be deemed to have come into force on June 5, 1992, are retroactive to the extent necessary to give them effect on and after that date and apply to any mistake that occurred on or after that date.

(5) Sections 8 to 10 come into force by regulation of the Lieutenant Governor in Council.


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