Meet the New Tax – PST Advice for BC Cyclists

Bob went to unusual lengths to ensure his new bike escaped the eyes of the tax collector.
Some cyclists are reportedly going to unusual lengths to ensure their cycling purchases escape the watchful eyes of the tax collector.

Bringing Tax Free Back

The return of the PST (provincial sales tax) in British Columbia brought welcome tax exemptions for bicycle-buying BC residents, but there are some details you should know – to make the most of the new (old) system.

No New Taxes

But industry tech change doesn’t see benefit of long-standing exemption
The return of the PST is also the return of a tax exemption BC cyclists had long enjoyed. New bikes and parts are once again tax free in this province. Sadly, the tax-free status isn’t extended to the growing e-bike segment. And with e-bikes occupying the upper end of the price range, it’s possible the tax could impact sales. A full-featured ebike such as the Sport XS750 by Canadian maker Ohm Cycles costs over $4000. That works out to roughly $300 in PST added to the cost.

This e-trike, used by a Masset, BC senior citizen, isn't tax exempt, while gov't can't find enough takers for its $5000 per vehicle, $14.3 million electric car rebate program.
This e-trike, used by a Masset, BC senior citizen, isn’t tax exempt. Meanwhile gov’t can’t find enough takers for its $5000 per vehicle, $14.3 million electric car rebate program.

Not the recognition of zero emission alternatives one might expect from government. Especially when placed beside a recent (March 26, 2013) announcement – extending the LiveSmart BC transportation incentives, an undersubscribed $14.3 million program giving BC residents $5000 to buy an electric car. Motorists who want to get electrified now have another year (March 2014) to get their slice of the remaining $2.5 million.

Accessorize While It’s New

Tax-free when bought with bike
Most accessories are exempt if bought with a new bike. This includes panniers, racks, bottle cages, pumps, etc. Unfortunate exceptions are child carriers/trailers and cycle computers. Buy non-safety-related accessories after you’ve purchased your new bike however, and you pay PST.

Safety Escapes Tax

cycle chic adherents heard screaming "you're doing it wrong" as local politicians mix modern street clothes with traditional 'cyclist' garb including ceremonial headdresses and hi-viz  vests
Cycle Chic adherents heard screaming, “You’re doing it wrong,” as local politicians mix regular street clothes with traditional ‘cyclist’ costume, including ceremonial headdresses and vests.

Lights qualify as safety equipment. These are tax-free no matter what kind of bike or when they are bought. Bells and horns, helmets, safety vests, and bibs are also PST-exempt. You may consider asking your retailer to exempt purchases of jacket and vests, even if they only have subtle reflective piping or details. These arguably fulfill the same safety function as a high-viz vest. As with all clothing, it’s tax-free if bought for a child younger than 15 years.

Parts/Service PST-Free (mostly)

Parts essential to the basic functioning of a bicycle are tax-free. So is any labour for installation, repair, or maintenance. Tax-free items include the obvious such as drivetrain, brakes, and wheel components, but also lights, reflectors, handlebar tape, fenders, saddles, and suspension. Tires and tubes are tax-free. Tube repair kits are not, filed under the same taxable status as chain oil, pants clips, and cycling shoes and booties. Festive cyclists will be delighted to know that streamers and flags are exempt from the PST. We can only ponder the arcane wisdom and aesthetics of the tax collector

Small Wheel Taxation Blues

unicycmaddy
Eyes downcast, she realized her single wheeled dreams could never be realized in such a hostile tax climate.

As mentioned, bicycle purchases are tax-free. This also includes tricycles. Except those with a wheel diameter of less than 350mm (13.7 inches). For reference, a typical ‘first’ tricycle has 10-inch diameter wheels. There’s also no love for unicyclists, who must pay the PST, as well as buyers of push scooters. Overall, the application of the tax-free status afforded bicycles is rigidly defined with the return of the PST, but the provincial government missed a great opportunity to update and rationalize the tax rules.  To further encourage BC residents to embrace their active transportation options, additional tax relief would be a welcome approach.

Expecting a tax refund? Pondering a new (tax-free) bike to celebrate Spring? This handy bike shopper’s checklist makes comparison shopping easier.

 

Official Provincial Sales Tax (PST) information
Bulletin 204 – Bicycles and Tricycles

(thanks to John Whistler for the initial briefing on PST-related changes)

1 Comment

  1. Dharma Dog | |

    The reason for that $5,000 e-car subsidy being undersubscribed is that e-cars are overpriced to begin with. Typically, if manufacturers see that consumers will get a free $5,000 from the government to buy their product, they merely jack up the price of that product by $5,000 and get free money from the government. Hey, this is just how the market works! It makes no sense to leave money on the table. One of the “promises” of the HST was that this would lower prices. I don’t think anybody lowered any prices, despite the cost savings to business in addition to their input tax credits.

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