Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
Excise and Specialty Tax Directorate
Place de Ville, Tower A, 5th floor
320 Queen Street
Ottawa ON K1A 0L5
[Client]
[Client Address]
Case Number: 9000341
December 24, 2024
Dear [Client]:
Subject: LUXURY TAX INTERPRETATION
Luxury tax on the sale of vehicles sold for a price over $100,000
Thank you for your letter received on [mm/dd/yyyy], concerning the application of the luxury tax on a certain vehicle.
All legislative references are to the Select Luxury Items Tax Act (the Act) unless otherwise specified.
Statement of Facts
From the documents that you have provided, we understand the following:
1. The vehicle in question is the [subject vehicle].
2. You have indicated that the manufacturer’s label on the driver side door jam says that that the vehicle weighs in excess of [XXX] kg.
Interpretation Requested
You would like to request an interpretation from the CRA on whether luxury tax applies on the sale of the [subject vehicle].
Interpretation Given
Based on the facts set out above, there isn’t enough information to provide you a definitive answer.
Explanation
The luxury tax applies to vehicles that meet the definition of “subject vehicle” under the Act and that are priced above the $100,000 price threshold. One of the criterion required for a vehicle to meet the definition of a subject vehicle, includes the requirement that the vehicle has a gross vehicle weight rating (GVWR) that is less than or equal to 3,856 kg.
Assuming the [subject vehicle] is priced above the $100,000 price threshold. Based on the information that you have provided, we understand that the [subject vehicle] weighs in excess of [xxx]kg. However, it is unclear what the GVWR is for this vehicle. If the [subject vehicle]’s GVWR exceeds the threshold of 3,856 kg specified in the Act, the vehicle does not meet the definition of a subject vehicle, and the luxury tax does not apply on the sale.
In accordance with the conditions and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the interpretations provided in this letter, including any additional information, are not a ruling and are not binding on the CRA with respect to any particular situation. Future changes to the Act, regulations, or the CRA's interpretation policy may affect the interpretations or additional information provided in this letter.
If you require clarification with respect to any of the issues discussed in this letter, please reach me directly at 343-572-4194.
Yours truly,
Alfonso Capretta
Manager
Luxury Tax Unit
Excise Tax and Fuel Charge Division
Excise and Specialty Tax Directorate
Legislative Policy and Regulatory Affairs Branch
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