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Hidden Tax Hitting Manitoba Motorists in the Wallet

October 14, 2010 7:15 AM | News

TIGNES, FRANCE - MARCH 11: A snowmobile demostration during the Winter X Games Europe on March 11, 2010 in Tignes, France. (Photo by Julian Finney/Getty Images)

If you’re thinking about buying a snowmobile as winter approaches, consider the extra government tax you’ll have to pay that very few people know about.

Before June 1 of this year, those who purchased a used snowmobile, motorcycle or all-terrain vehicle only paid PST on the asking price. After June 1, consumers are now on the line to pay provincial sales tax on the higher value of the vehicle — what the blue book value is and not what the seller may be asking.

For example, a consumer who purchased a snowmobile for $5,500 would have to pay tax on $6,350, which is the value according to the Province of Manitoba’s blue book. This would result in an extra $60 in PST.

Colin Craig of the Canadian Taxpayers Federation calls it a “hidden sales tax,” and says it was hard to spot in the provincial budget, noting it was listed under the “Technical and Administrative Measures” section.

The budget makes reference to the subtle tax increase in the following way: “The vehicle valuation program will be expanded to include private purchases of motorcycles, all-terrain vehicles and snowmobiles.”

The tax changes for the three types of mentioned recreational vehicles was first introduced on March 23, 2010 when Finance Minister Rosann Wowchuk rolled out her budget.

The CTF says Wowchuk never addressed the tax change in her speech, making it difficult for Manitobans to be made aware of the increase.