1993 Legislative Session: 2nd Session, 35th Parliament
THIRD READING


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


Certified correct as passed Third Reading on the 27th day of July, 1993
Ian D. Izard, Law Clerk.


HONOURABLE GLEN CLARK
MINISTER OF FINANCE AND
CORPORATE RELATIONS

BILL 7 -- 1993

SOCIAL SERVICE TAX AMENDMENT ACT, 1993

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

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

(a) by adding the following definition:

"motor vehicle" means motor vehicle as defined in the Motor Vehicle Act; ,

(b) by adding the following definitions:

"park", in respect of a motor vehicle, does not include storage where the motor vehicle is stored for a period of more than 28 consecutive days;

"parking right" means the right to park a motor vehicle at a parking site for a period of time of any length;

"parking site" means any location within a prescribed geographic area in the Province, at which a motor vehicle may, for a price or other consideration, be parked for a period of time of any length; ,

(c) by adding the following definition:

"passenger vehicle" means a motor vehicle designed primarily as a means of transport for individuals and includes vehicles prescribed as passenger vehicles; ,

(d) by repealing the definition of "purchase price" and substituting the following:

"purchase price" means

(a) in relation to tangible personal property, 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, in addition,

(i) the charges for installation of the tangible personal property sold, and for interest, finance, service, customs, excise and transportation in relation to the tangible personal property, whether or not those charges are shown separately on the invoice or in the seller's books,

(ii) if the tangible personal property is purchased, manufactured, processed or otherwise acquired outside the Province and subsequently brought or sent into or received in the Province for use or consumption in the Province, the costs and expenses of and to the user for materials, labour and other manufacturing and processing costs and expenses, and for service, customs, excise, transportation and other costs and expenses incurred by the user before the use of the tangible personal property in the Province,

(b) in relation to legal services,

(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, and

(c) in relation to a parking right, 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 parking right as price or on account of the price of the parking right; ,

(e) in the definition of "purchase price" by striking out "and" at the end of paragraph (b), by adding ", and" at the end of paragraph (c) and by adding the following:

(d) in relation to a taxable service, 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; ,

(f) in the definition of "purchaser" by striking out "and" at the end of paragraph (b), by adding ", and" at the end of paragraph (c) and by adding the following:

(d) 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; ,

(g) in the definition of "purchaser" by striking out "and" at the end of paragraph (c), by adding ", and" at the end of paragraph (d) and by adding the following:

(e) 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

(h) by adding the following definition:

"taxable service" means any service provided to install, assemble, dismantle, repair, adjust, alter, restore, recondition, refinish or maintain tangible personal property, but does not include any service

(a) provided to install tangible personal property that will become real property on installation,

(b) provided to install, assemble, dismantle, repair, adjust, alter, 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; .

2 Section 2 is amended

(a) in subsection (1) by striking out "6%" and substituting "7%",

(b) in subsection (1.01) by striking out "(1), (4) and (4.2)" and substituting "(1) and (4)",

(c) by adding the following subsection:

(1.02) Notwithstanding any other provision of this section, the rate of the tax payable under subsections (1) and (4) on a passenger vehicle is

(a) 7% of the purchase price of the vehicle where the purchase price is less than $30 000,

(b) 8% of the purchase price of the vehicle where the purchase price is $30 000 or more but less than $31 000,

(c) 9% of the purchase price of the vehicle where the purchase price is $31 000 or more but less than $32 000, or

(d) 10% of the purchase price of the vehicle where the purchase price is $32 000 or more. ,

(d) by repealing subsection (1.6),

(e) by adding the following subsections:

(1.7) Subject to subsections (1.9) and (9.2), where a purchaser, after March 30, 1993, takes delivery of tangible personal property and pays to Her Majesty in right of the Province tax on that tangible personal property under this section, the commissioner, on application and on receipt of evidence satisfactory to the commissioner, shall, out of the consolidated revenue fund, pay to the purchaser a refund calculated in accordance with subsection (1.8) where

(a) the tangible personal property of which delivery is taken is to be incorporated into real property in order to carry out a fixed price or lump sum contract entered into before March 31, 1993 for the construction, repair or improvement of real property, or

(b) delivery is taken, in execution of a written contract made by the purchaser with the seller before March 31, 1993, of not more than the quantity of the tangible personal property specified in the contract.

(1.8) The refund payable to a purchaser under subsection (1.7) shall be equal to

(a) in the case of tangible personal property other than liquor, as defined in the Liquor Distribution Act, or a passenger vehicle, 1% of the purchase price of that property, or

(b) in the case of a passenger vehicle,

(i) 1% of the purchase price of the vehicle where the tax was paid under subsection (1.02) (a),

(ii) 2% of the purchase price of the vehicle where the tax was paid under subsection (1.02) (b),

(iii) 3% of the purchase price of the vehicle where the tax was paid under subsection (1.02) (c), and

(iv) 4% of the purchase price of the vehicle where the tax was paid under subsection (1.02) (d).

(1.9) No refund shall be paid under subsection (1.7) (a) where the purchaser is entitled, under the fixed price or lump sum contract, to recover the increase in tax resulting from the enactment of section 2 of the Social Service Tax Amendment Act, 1993. ,

(f) by repealing subsection (3.3) and substituting the following:

(3.3) A lessee under a lease, other than a lease referred to in section 4 (1) (z.94), shall be deemed to be a purchaser of the leased property where

(a) the lease contains provisions that give the lessee an option or right to acquire title to the leased property, and

(b) the consideration payable by the lessee to acquire title under that option or right is, at the time the lease is entered into, less than a prescribed percentage of the fair market value of the property.

(3.31) A lessee who is deemed to be a purchaser of leased property under subsection (3.3) shall, at the time the lessee enters into the lease, pay to Her Majesty in right of the Province a tax

(a) where the leased property is not a passenger vehicle, at the rate of 7% of the total consideration, or

(b) where the leased property is a passenger vehicle, at the rate of

(i) 7% of the total consideration where the fair market value of the vehicle is less than $30 000,

(ii) 8% of the total consideration where the fair market value of the vehicle is $30 000 or more but less than $31 000,

(iii) 9% of the total consideration where the fair market value of the vehicle is $31 000 or more but less than $32 000, or

(iv) 10% of the total consideration where the fair market value of the vehicle is $32 000 or more.

(3.32) For the purposes of subsection (3.31) "total consideration" means the total consideration payable to the lessor under the lease including the consideration payable by the lessee to acquire the title to the leased property under the option or right.

(3.33) Where the commissioner considers that the value attributed to the leased property as its fair market value for the purposes of subsection (3.3) or (3.31) is less than the fair market value of that property, the commissioner may determine the fair market value for the purposes of subsection (3.3) or (3.31). ,

(g) in subsection (9) by striking out "the tax," and substituting "the applicable tax," and by striking out "6%" and substituting "7%", and

(h) by adding the following subsections:

(9.1) Subsection (9) does not apply where the tangible personal property sold is a passenger vehicle.

(9.2) Subject to subsection (9.3), where a purchaser of a passenger vehicle purchased under a contract referred to in subsection (9.3) pays to Her Majesty in right of the Province tax on that vehicle under this section, and where tangible personal property referred to in subsection (9.3) (c) is accepted after March 30, 1993 by the seller on account of the price of the passenger vehicle sold, the commissioner, on application and on receipt of evidence satisfactory to the commissioner, shall, out of the consolidated revenue fund, pay to the purchaser, instead of a refund under subsection (1.7),

(a) a refund equal to the tax that was paid on the portion of the purchase price referred to in subsection (9.3) (c), and

(b) a refund, calculated in accordance with the method of calculation provided for in subsection (1.8), on that portion of the purchase price not included in the refund calculations made under paragraph (a) of this subsection.

(9.3) Subsection (9.2) applies where

(a) the contract to purchase the passenger vehicle is a written contract made before March 31, 1993,

(b) the purchaser takes delivery of the vehicle after March 30, 1993, and

(c) a portion of the purchase price of the vehicle is satisfied by delivery to the seller of tangible personal property on which the purchaser has previously paid the applicable tax.

3 Section 2.02 is amended

(a) in subsection (1) by striking out "6%" and substituting "7%",

(b) in subsection (3) by striking out "at the rate of 6% of all amounts payable under the contract for or in relation to the modification or processing." and substituting "calculated in accordance with subsection (3.1).", and

(c) by adding the following subsections:

(3.1) The tax payable under subsection (3) shall be calculated as follows:

(a) where the tangible personal property referred to in subsection (3) is not a passenger vehicle, at the rate of 7% of the contract amount;

(b) where the tangible personal property referred to in subsection (3) is a passenger vehicle, at the rate of

(i) 7% of the contract amount where the purchase price of the vehicle is less than $30 000,

(ii) 8% of the contract amount where the purchase price of the vehicle is $30 000 or more but less than $31 000,

(iii) 9% of the contract amount where the purchase price of the vehicle is $31 000 or more but less than $32 000, and

(iv) 10% of the contract amount where the purchase price of the vehicle is $32 000 or more.

(3.2) For the purposes of subsection (3.1) "contract amount" means the aggregate of all amounts payable under the contract referred to in subsection (3) for or in relation to the modification or processing referred to in subsection (3) (b).

4 The following section is added:

Parking tax

2.03 (1) Unless subsection (2) applies, a purchaser of a parking right shall pay to Her Majesty in right of the Province a tax at the rate of 7% of the purchase price of the parking right.

(2) Subject to the terms and conditions the Lieutenant Governor in Council specifies in the regulations, no tax is payable under subsection (1) in respect of a parking right purchased

(a) for residential parking as that term is defined in the regulations,

(b) for parking at a prescribed parking site, or

(c) by a person who is a member of a prescribed class of persons.

(3) The tax under subsection (1) shall be paid at the time the purchase price for the parking right is paid or by the date on which the purchase price is payable, whichever is earlier.

(4) Where the commissioner considers it appropriate to do so, the commissioner may make a valuation of a parking right that passes at a sale, and the sale price of the parking right for the purposes of taxation under this Act shall be as determined by the commissioner.

(5) The tax imposed by this Act shall be calculated separately on every purchase of a parking right, and shall be computed to the nearest cent, and 1/2 shall be counted as 1, but where, on the same occasion or as part of one transaction, several parking rights are purchased, the total of the purchases shall be deemed one purchase for the purposes of this Act.

(6) For the purposes of applying the other provisions of this Act in relation to a tax imposed by this section,

(a) the receiving of a parking right for consideration is deemed to be a purchase, and

(b) the provision of a parking right for consideration is deemed to be a sale of tangible personal property at a retail sale, except that section 2 does not apply to a purchase of a parking right.

5 The following section is added:

Taxes on the provision of taxable service

2.04 (1) A tax on the provision of a taxable service in the Province shall be paid to Her Majesty in right of the Province by a purchaser at the rate of 7% of the purchase price of the taxable service.

(2) The tax payable under subsection (1) shall be paid at the time the purchase price of the taxable service is paid or by the date on which the purchase price is payable, whichever is earlier.

(3) A purchaser for whom a taxable service is performed after September 30, 1993 but before October 1, 1994 in execution of a written contract made with the seller of the taxable service before March 31, 1993 shall pay to Her Majesty in right of the Province at the time referred to in subsection (2) tax at the rate payable under this section, but the commissioner, on application and on receipt of evidence satisfactory to the commissioner, shall, out of the consolidated revenue fund, pay to the purchaser a refund of the tax paid.

(4) A person who

(a) resides, ordinarily resides or carries on business in the Province,

(b) takes or sends tangible personal property out of the Province

(i) primarily for the purpose of having taxable service provided in respect of the property, and

(ii) has taxable service provided in respect of the property, and

(c) brings or sends into the Province or receives delivery in the Province of the property referred to in paragraph (b) for use or consumption

(i) by the person,

(ii) by another person at the person's expense,

(iii) by another person for whom the person acts as agent, or

(iv) by another person at the expense of a principal for whom the person acts as agent, shall immediately report the matter in writing to the commissioner, supply to the commissioner all pertinent information required by the commissioner in respect of the taxable service provided in respect of the property and shall, on the date that the tangible personal property is returned to the Province under paragraph (c), pay to Her Majesty in right of the Province a tax in respect of the taxable service, with the tax calculated as 7% of the purchase price of the taxable service.

(5) A person who takes or sends tangible personal property out of the Province primarily for the purpose of using that tangible personal property outside of the Province for a period of time is exempt from tax under this section in respect of any taxable service provided in respect of the tangible personal property while it is out of the Province during that period.

(6) Subject to the terms and conditions the Lieutenant Governor in Council specifies in the regulations, no tax is payable under subsection (1) or (4) in respect of

(a) a prescribed taxable service, or

(b) a taxable service purchased by a person who is a member of a prescribed class of persons.

(7) For the purposes of subsection (4), a person shall be deemed to be carrying on business in the Province where an employee or other representative of that person carries on activities in the Province on that person's behalf for the purpose of promoting the sale or use of that person's products or services.

(8) Where the commissioner considers it appropriate to do so, the commissioner may make a valuation of a taxable service that passes at a sale, and the sale price of the taxable service for the purpose of taxation under this Act shall be as determined by the commissioner.

(9) The tax imposed by this Act shall be calculated separately on every purchase of a taxable service, and shall be computed to the nearest cent, and 1/2 shall be counted as 1, but where, on the same occasion or as part of one transaction, several taxable services are purchased, the total of the purchases shall be deemed one purchase for the purposes of this Act.

(10) For the purposes of applying the other provisions of this Act in relation to a tax imposed by this section,

(a) the receiving of a taxable service for consideration is deemed to be a purchase, and

(b) the provision of a taxable service for consideration is deemed to be a sale of tangible personal property at a retail sale, except that section 2 does not apply to a purchase of a taxable service.

6 Section 2.1 (1) is repealed and the following substituted:

(1) A lessee to whom section 2 (3.3) does not apply shall pay to Her Majesty in right of the Province a tax,

(a) where the leased property is not a passenger vehicle, at the rate of 7% of the lease price of the leased property, or

(b) where the leased property is a passenger vehicle, at the rate of

(i) 7% of the lease price where the tax rate value of the vehicle is less than $30 000,

(ii) 8% of the lease price where the tax rate value of the vehicle is $30 000 or more but less than $31 000,

(iii) 9% of the lease price where the tax rate value of the vehicle is $31 000 or more but less than $32 000, or

(iv) 10% of the lease price where the tax rate value of the vehicle is $32 000 or more.

(1.1) For the purposes of subsection (1) "tax rate value", in respect of a passenger vehicle,

(a) means the price at which the legal and beneficial interest in the vehicle 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,

(b) shall be determined under paragraph (a) as at the later of

(i) March 31, 1993, and

(ii) the first date on which the vehicle is leased by the lessor, and

(c) is, for so long as the lessor remains the owner of the vehicle, the tax rate value determined for the vehicle under paragraphs (a) and (b).

7 Section 2.2 is amended

(a) in subsection (1) by striking out "6%" and substituting "7%",

(b) by repealing subsection (3) (a) (i) and (ii),

(c) in subsection (3) (a) (iii) by striking out "March 19, 1987, and" and substituting "March 19, 1987 and before March 31, 1993, or", and

(d) in subsection (3) (a) by adding the following paragraph:

(iv) 7% of the amount received where the payment referred to in subsection (1) (b) comes due after March 30, 1993, and .

8 Section 4 is amended

(a) by adding the following subsection:

(3.1) A purchaser who purchases a parking right is exempt from the tax imposed by section 2.03 in respect of any portion of the parking right that was purchased for the purpose only of selling it to other persons. , and

(b) by adding the following subsection:

(3.2) A purchaser who purchases a taxable service is exempt from the tax imposed by section 2.04 on that purchase if the purchase is made for the purpose only of selling that taxable service to other persons.

9 Section 7 (3) is amended

(a) by striking out "2.013 or 2.02," and substituting "2.013, 2.02 or 2.03,", and

(b) by striking out "2.02 or 2.03," and substituting "2.02, 2.03 or 2.04,".

10 Section 13 (1) (d) is amended

(a) by striking out "2 (3)," and substituting "2 (1.7), (3), (3.33), (9.2),",

(b) by adding "2.03 (4)," after "(17),", and

(c) by adding "2.04 (3) and (8)," after "2.03 (4),".

11 Section 23 is repealed and the following substituted:

Application for injunction

23 The minister may apply to the Supreme Court for an injunction ordering a vendor or lessor to cease selling or leasing or offering to sell or lease tangible personal property until the vendor or lessor fulfills the vendor's or lessor's obligations under this Act and pays the costs of the application if, without a registration certificate in force under section 3 (1), the vendor sells or offers to sell or the lessor leases or offers to lease any of the following:

(a) tangible personal property that is taxable under section 2, 2.1 or 2.2;

(b) tangible personal property that is subject to a levy under section 2.4.

12 Section 23 is amended

(a) by adding the following paragraph:

(d) a parking right that is taxable under section 2.03; , and

(b) by striking out "or legal services" and substituting ", legal services or parking rights".

13 Section 23 is amended

(a) by adding the following paragraph:

(e) a taxable service in relation to which tax is payable under section 2.04. , and

(b) by striking out "or parking rights" and substituting ", parking rights or taxable services".

14 Section 33 (1.1) is amended

(a) by adding "2.03," after "2.02,", and

(b) by adding "2.04," after "2.03,".

15 The following section is added:

Specified amount of tax

36.1 Notwithstanding any other section in this Act, where the purchase price for tangible personal property, a service or a right that is taxable under this Act is, because of the equipment by or through which the purchase is made, to be paid by coin or other legal tender, the Lieutenant Governor in Council may by regulation specify the amount of tax payable on the purchase in an amount that is equal to or less than the amount that would otherwise be payable under this Act.

16 Section 37 (2) is amended

(a) in paragraph (c.1) by adding "2.03," after "2.02,",

(b) in paragraph (c.1) by adding "2.04," after "2.03,",

(c) by adding the following paragraphs:

(e.2) in relation to a parking right,

(i) prescribing parking sites or classes of parking sites for the purposes of section 2.03 (2) (b), subject to the terms and conditions the Lieutenant Governor in Council specifies, and

(ii) prescribing one or more classes of persons for the purposes of section 2.03 (2) (c), subject to the terms and conditions the Lieutenant Governor in Council specifies;

(e.3) prescribing one or more geographic areas within the Province or prescribing the Province as a geographic area for the purposes of the definition of "parking site" in section 1 (1); ,

(d) by adding the following paragraph:

(e.4) in relation to a taxable service,

(i) prescribing tangible personal property for the purposes of paragraph (b) of the definition of "taxable service" in section 1 (1), subject to the terms and conditions the Lieutenant Governor in Council specifies,

(ii) prescribing taxable services or classes of taxable services in relation to which no tax is payable under section 2.04 (6) (a), subject to the terms and conditions the Lieutenant Governor in Council specifies, and

(iii) prescribing one or more classes of persons for the purposes of section 2.04 (6) (b), subject to the terms and conditions the Lieutenant Governor in Council specifies; ,

(e) by adding the following paragraph:

(f.1) prescribing vehicles that are included and vehicles that are not included within the meaning of passenger vehicle; , and

(f) by adding the following paragraph:

(m) specifying the amount of tax payable on a purchase referred to in section 36.1.

Transitional

17 (1) Where a purchaser, after March 30, 1993, takes delivery of tangible personal property referred to in section 3.20 (b), (c), (f), (g), (h), (i), (j) or (k) of B.C. Reg. 84/58 as it read as at March 29, 1993 and pays to Her Majesty in right of the Province tax under section 2 of the Social Service Tax Act as amended by this Act, the commissioner, on application and on receipt of evidence satisfactory to the commissioner, shall, out of the consolidated revenue fund, pay to the purchaser a refund equal to the tax paid, where

(a) the tangible personal property of which delivery is taken is to be incorporated into real property in order to carry out a fixed price or lump sum contract entered into before March 31, 1993 for the construction, repair or improvement of real property, or

(b) delivery is taken, in execution of a written contract made by the purchaser with the seller before March 31, 1993, of not more than the quantity of the tangible personal property specified in the contract.

(2) No refund shall be paid under subsection (1) (a) where the purchaser is entitled under the fixed price or lump sum contract to recover the tax paid on the purchase of the tangible personal property.

(3) Where a parking right is purchased after March 30, 1993 and before June 1, 1993, tax is payable under section 2.03 (1) of the Social Service Tax Act as enacted by this Act on the portion of the purchase price for the parking right that relates to the period after May 31, 1993.

Transitional -- regulations

18 (1) Regulations that may be made under the Social Service Tax Act as a result of the enactment of sections 1 (a) and (c), 2, 3, 6, 7, 10 (a), 11, 15, 16 (e) and (f) and 17 may, if made before March 31, 1994, be made retroactive to March 31, 1993 and, where made retroactive, shall be deemed to have come into force on the date specified in the regulation.

(2) Regulations that may be made under the Social Service Tax Act as a result of the enactment of sections 1 (b), (d) and (f), 4, 8 (a), 9 (a), 10 (b), 12, 14 (a) and 16 (a) and (c) may, if made before June 1, 1994, be made retroactive to June 1, 1993 and, where made retroactive, shall be deemed to have come into force on the date specified in the regulation.

(3) Regulations that may be made under the Social Service Tax Act as a result of the enactment of sections 1 (e), (g) and (h), 5, 8 (b), 9 (b), 10 (c), 13, 14 (b), 16 (b) and (d) may, if made before October 1, 1994, be made retroactive to October 1, 1993 and, where made retroactive, shall be deemed to have come into force on the date specified in the regulation.

Commencement

19 (1) Sections 1 (a) and (c), 2, 3, 6, 7, 10 (a), 11, 15, 16 (e) and (f), 17 and 18 shall be deemed to have come into force on March 31, 1993 and are retroactive to the extent necessary to give them effect on and after that date.

(2) Sections 1 (b), (d) and (f), 4, 8 (a), 9 (a), 10 (b), 12, 14 (a) and 16 (a) and (c) are deemed to come into force on June 1, 1993 and are retroactive to the extent necessary to give them effect on and and after that date.

(3) Sections 1 (e), (g) and (h), 5, 8 (b), 9 (b), 10 (c), 13, 14 (b), 16 (b) and (d) are deemed to come into force on October 1, 1993 and are retroactive to the extent necessary to give them effect on and after that date.


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