October 07, 2011

Southside Nissan Ltd. v. The Queen

British Columbia Supreme Court No. A920193

This was an appeal of an assessment of social services tax by the Minister of Finance and Corporate Relations of British Columbia. Two issues were involved: whether pickup trucks used by the dealership as “parts trucks” were included in the resale inventory of the dealer, and thus eligible for a reduced rate of social services tax based on the use of the truck, or whether they were removed from the dealer’s resale inventory, which made the dealer liable to social services tax on the full purchase price. The second issue involved determining whether social services tax was payable on the labour component of certain services included as part of a “protection package” for vehicles. The components of the protection package included such things as undercoating and rustproofing.

The Court decided that trucks used as parts trucks never left the resale inventory of the dealer. Therefore, the dealership was eligible for a reduced rate of social services tax based on the use made by the dealer of the parts trucks.
On the protection package issue, the Court decided that the protection package was acquired as part of the same transaction and agreement in which the motor vehicle was purchased. Therefore, the value of the labour component of the protection package was included in the overall cost of the motor vehicle on which social services tax had been paid.