Forcing people who buy a car from an individual to pay harmonized sales tax is not "levelling the playing field" as car dealers claim.
First, if you run a business you get paid to collect the HST. Private sellers do not. Secondly, as a business you only pay the net HST. Any HST you pay to run your business you can deduct from the HST you send to the government.
Thirdly, when you buy at a dealer you only pay HST on the difference between your purchase and the trade-in value.
For example, if I trade my old $5,000 car for a newer $10,000 car, I only pay HST on the $5,000 difference. However if I sell privately, the buyer will have to pay HST on the $5,000 he spends on my car and I will have to pay HST on the full price of the $10,000 car I buy to replace it.
A tax windfall of $5,000 for the government.
Of course, car dealers love this new tax rule because it puts private sellers at a huge disadvantage, not a level playing field.
S.I. Petersen
Nanaimo
© Copyright (c) The Victoria Times Colonist
