The 2022 British Columbia budget did not directly increase corporate or personal income tax rates. However, there are multiple indirect and PST tax changes. We have highlighted a few below.
Purchase price of private vehicle sales
Effective October 1, 2022, tax on private sales of motor vehicles will be based on the greater of the reported purchase price and the average wholesale value of the vehicle. This does not apply to a trade-in.
Clean buildings tax credit introduced
Effective February 23, 2022, a new temporary clean buildings tax credit is introduced for retrofits that improve the energy efficiency of eligible commercial and multi-unit residential buildings with four or more dwellings. The credit provides a refundable tax credit of 5 percent of qualifying expenditures made before April 1, 2025.
Exemption for heat pumps introduced and tax rate on fossil fuel combustion systems increased
Effective April 1, 2022, heat pumps are exempt from PST. Heat pumps purchased before April 1, 2022, and installed into real property on or after April 1, 2022, will be eligible for a refund for the PST paid.
The PST on fossil fuel combustion systems that heat or cool buildings or water is increased to 12 percent from 7 percent.
PST exemption for used ZEVs introduced and passenger vehicle surtax threshold for ZEVs increased
Zero-emission vehicles (ZEVs) include battery electric, plug-in hybrid electric and hydrogen fuel-cell vehicles. The budget proposes to exempt from PST, the private and commercial sales of used ZEVs that have been driven for at least 6,000 kilometres. The ZEV vehicle surtax threshold will also be increased to $75,000 from $55,000. Both measures are set to end February 22, 2027.
New PST requirements for marketplace facilitators introduced
Marketplace facilitators are vendors who collect payments from consumers through their online marketplace and remit those payments to a third-party seller.
Effective July 1, 2022, businesses that are online marketplace facilitators will be required to collect and remit PST B.C. sales and leases of goods, services, or software. Additionally, marketplace facilitators will be required to charge PST on marketplace services they provide to sellers.
Training tax credits extended
The training tax credit is for employers and apprentices who take part in eligible apprenticeship programs administered through the Industry Training Authority (ITA).
The training tax credit is effective until the end of 2022 and the budget proposes to extend the training tax credit for another two years to December 31, 2024.
Contact us with any questions about how these tax changes effect your personal finances or business affairs.
