luxury car tax

Canada, but, not quite law just yet...
https://www.bdo.ca/en-ca/insights/tax/tax-articles/luxury-goods-tax/

USA already tried and repealed (1991-2002), it was a huge failure...and it will be in Canada as well if it proceeds (failure meaning it will not "collect" the amount of taxes expected)

USA history
https://pocketsense.com/luxury-car-tax-8560.html

 

If the politicians want those extra funds/tax's they will find a way.
Might not be call a luxury tax but it will be a luxury tax with a different name.

 

It's on its way in. New cars and boats only. Used car market is going to go bazooka. Tax fileings are going to be quite different for new car dealerships I presume.

 

The US Luxury Tax coupled with a double gas guzzler tax and a Gulf War not only ground auto sales to it halt it bankrupted the marine industry but it put the US and the world into a recession.

 

Montana has a luxury car tax; anything newer than 10 years and base price of 200,000.00+ IIRC. It is added to your plate taxes; 825.00

 

Ooof. 825 bucks... Man... That's tough... Guess I won't save the 35k and register it in Montana to avoid sales tax... Lol. Kidding of course.


I think Montana has more Ferraris registered in their state than California

 

825.00 That's a laugh, its barely an oil change. In Canada on a new Ferrari they will start at 30-40 K and go up from there!
I was going to order a new Portofino M but because there was no way to guarantee that the car would arrive before the tax came into effect, I walked away from the deal and bought a used Portofino with 750 miles on it instead.

 

I know for a fact that they have more high end cars per capita that are registered in Montana than any other state(particularly the ones that don’t live there). And that is not counting the motor homes that don’t live there. They take in a lot of revenue for not having a sales tax, haha

 

We are talking “luxury tax” tho. That 30-40 isn’t a luxury tax is it?

 

Do the math, on a 21 Portofino that I was going to order the price with options was about 350K. Take away the base 100K exemption that leaves 250K subject to 20% tax = 50K and the way they were talking that 50K tax was also going to be subject to the 5% GST (goods and services) Tax so 5% of 50K = 2500.00 so total tax 52,500.00!!!!!!!

 

My point was do they call that a luxury tax? Doesn’t everyone pay that 20% on any new car. Even with a 40,000.00 car you would still pay 20% tax or not

 

We're talking federal tax, Province's (states) are free to add their own taxes. The province I live in you would only pay 5% GST for tax on any vehicle purchase no matter what the value was. In other provinces they do have their own taxes but this would be over and above that and only apply to vehicles at 101K and above.

 

The proposed tax is 10% on anything >$200k. Between $100k-$200k there is a linear increase in the tax from 0%-10%.

"It will be calculated at the lesser of 20% of the value above a set threshold ($100,000 for cars) and 10% of the full value of the item subjected to tax."

The way it's worded is confusing, but if you do the math it makes more sense.

 

Yes it is confusing, so in the case I cited above. I could have elected to pay 10% of the full value which would work out to 35K saving some money. But lets say I was buying a BMW for 125K then it would be better to opt for the 20% above for the amount above 100k which in this case would be 5K taxes on the 25 thousand instead of the 10% on total price which would be 25 thousand.
Clear as mud! lol