Tax Interpretation Manual: Consumption Tax Rebate and Transition Act - Regulations

Regulation 1 – Definition

CTRT - REG 1/Act/Int.

Act

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 establishes that any reference to “Act” in the Consumption Tax Rebate and Transition Regulation refers to the Consumption Tax Rebate and Transition Act.

CTRT - REG 1/Commercial Activity/Int.

Commercial Activity

Reference: Regulation 23(1)(c) and (2)(c); Part IX [Goods and Services Tax] of the Excise Tax Act (Canada)

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 establishes that “commercial activity” has the same meaning as in Part IX [Goods and Services Tax] of the Excise Tax Act, defined as follows:

(a) a business carried on by the person (other than a business carried on without a reasonable expectation of profit by an individual, a personal trust or a partnership, all of the members of which are individuals), except to the extent to which the business involves the making of exempt supplies by the person,

(b) an adventure or concern of the person in the nature of trade (other than an adventure or concern engaged in without a reasonable expectation of profit by an individual, a personal trust or a partnership, all of the members of which are individuals), except to the extent to which the adventure or concern involves the making of exempt supplies by the person, and

(c) the making of a supply (other than an exempt supply) by the person of real property of the person, including anything done by the person in the course of or in connection with the making of the supply.

CTRT - REG 1/Specified Motor Vehicle/Int.

Specified Motor Vehicle

Reference: Regulation 28 and 29; Part IX [Goods and Services Tax] of the Excise Tax Act (Canada)

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 establishes that “specified motor vehicle” has the same meaning as in Part IX [Goods and Services Tax] of the Excise Tax Act, defined as follows:

(a) goods that are or would, if they were imported, be classified under any of tariff item 8701.20.00, subheading Nos. 8701.30 and 8701.90, heading No. 87.02, tariff item 8703.10.10, subheading Nos. 8703.21 to 8703.90 and 8704.21 to 8704.90, heading 87.05, tariff items 8711.20.00 to 8711.90.00 and 8713.90.00, 8716.10.21, 8716.10.29 and 8716.39.30 to 8716.40.00 and subheading No. 8716.80 of Schedule I to the Customs Tariff, other than racing cars classified under heading No. 87.03 of that Schedule and prescribed motor vehicles, and

(c) prescribed motor vehicles.

RESIDENTIAL ENERGY CREDIT AND REBATE

CTRT - REG 2(1)/Int.

(1) Registrant

Reference: Sections 1, definition of “registrant”, Part 4, and 65 of the Act; Regulations 3 and 9; Bulletin HST Notice #5 and #10; Part IX of the Excise Tax Act (Canada)

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 etablishes that, for the purposes of the residential energy and credit program, “registrant” has the same meaning as in paragraph (b) of that definition in the Act (see CTRT/SEC.1/REGISTRANT/Int.), as follows:

“registrant” – means a person who is registered under Subdivision d of Division V of Part IX [Goods and Services Tax] of the Excise Tax Act.

Only a supplier who is registered under the Excise Tax Act is a registrant for the purposes of the residential energy credit and rebate program.

CTRT - REG 2(2)/Int.

(2) Heat

Reference: Part 4 of the Act; Bulletin HST Notice #5 and #10

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 establishes that “heat”, as an energy product under the Act (see CTRT/SEC.1/ENERGY PRODUCT/Int.), includes the transfer of energy that results in cooling.

This clarification ensures that cooling – a relative decrease in temperature in a residential dwelling unit – is included as an energy product in the same manner as heat. Cooling is produced by heating and cooling systems such as geothermal or ground source heat exchangers and heat pumps.

Regulation 2 – Definitions

CTRT - REG 2(3)/Int.

(3) Residential Use

Reference: Part 4 of the Act; Bulletin HST Notice #5 and #10

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 establishes that “residential use” for the residential energy credit and rebate program does not include use for a business, commercial or industrial purpose.

The sale of an energy product (see CTRT/SEC.1/ENERGY PRODUCT/Int.) for a business, commercial or industrial use is subject to the harmonized sales tax and is not eligible for the residential energy credit or rebate program.

R.1 Emergency Shelters (Issued: 2011/06)

For the purposes of the Residential Energy and Rebate Program, an emergency shelter is not considered to be a "residential dwelling." An emergency shelter falls under the category of "a hotel, motel, lodge, resort or other building or part of a building providing overnight accommodation," under Regulation 2(3)(g).

Emergency shelters provide temporary overnight accommodation on an emergency basis for the homeless. Unlike assisted living residences and long term residential care facilities, the accommodation provided at the emergency shelter is considered to be transient accommodation.

CTRT - REG 2(4)/Int.

(4) Residential Dwelling

Reference: Section 1, definition of “residential dwelling” and Part 4 of the Act; Regulations 3 and 7; Bulletin HST Notice #5 and #10

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 defines “residential dwelling” for purposes of the residential energy credit and rebate program.

This regulation establishes that residential dwelling means: a house, cottage or other detached dwelling; a duplex; an apartment, condominium or townhouse; a building complex used only for the purpose of single family dwellings; an assisted living residence as defined under the Community Care and Assisted Living Act; or a long term residential care facility.

Land that is attributable to a building and used for residential purposes (e.g., lawn, garden) is included in the definition of residential dwelling.

Residential dwelling includes boats, campers and similar recreational vehicles provided they are used for a residential non-commercial purpose.

For purposes of clarity, the regulation lists types and uses of buildings that are not a residential dwelling (e.g., hotel, hospital, camp building, etc). A building or part of a building while under original construction is not a residential dwelling.

The definition of residential dwelling is consistent with the definition of “residential dwelling unit” under the Social Service Tax Act, which provided an exemption of provincial sales tax in relation to fuel, energy and conservation for use in a residential dwelling unit (see SSTA/REG.3.22).

Regulation 3 – When Registrant Must Not Provide A Credit

CTRT - REG 3/Int.

Reference: Part 4 of the Act; Bulletin HST Notice #5 and #10; Section 165(2) of the Excise Tax Act (Canada)

Interpretation (Issued: 2010/10, Revised: 2011/03)

Effective May 1, 2010, B.C. Reg. 113/2010 sets out the circumstances when suppliers of energy products must not provide an energy credit under the residential energy credit and rebate program to a person purchasing an energy product (see CTRT/SEC.9/Int.).

A credit can only be provided by the energy supplier in a circumstance where:

(a) the energy product is delivered to a residential dwelling, a building that contains a residential dwelling, or a storage tank or facility located at the residential dwelling;

(b) In the case of propane, heating oil or kerosene, that energy product is delivered to a residential dwelling on a continuous basis by pipe or similar type of conduit, or to a storage tank or facility located at the residential dwelling;

(c) In the case of a residential dwelling that is part of a multi-use building, the energy product is delivered to a storage tank or facility, or through a meter, that services only the part of the building used for residential use.

Effective July 1, 2010, under B.C. Reg. 215/2010, paragraph (d) was added. Energy suppliers must not provide an energy credit to a person listed under paragraph (d) if that person pays the tax imposed under section 165(2) [Tax in a participating province] of the Excise Tax Act (Canada) in respect of the energy product.

Effective March 1, 2011, under B.C. Reg. 31/2011, paragraph (e) was added. Energy suppliers must not provide an energy credit to the following British Columbia government entities:

These entities purchase energy products for residential use in residential dwellings. Due to their inclusion in Schedule A of the Reciprocal Taxation Agreement (Canada - British Columbia) dated June 30, 2010, the entities must pay the tax imposed under section 165(2) of the Excise Tax Act (i.e., GST/HST) on purchases of taxable property and services. On subsequent application to the Canada Revenue Agency, the entities are entitled to a rebate of 100 per cent of GST/HST paid or payable by them.

Section 165(2) of the Excise Tax Act is as follows:

Subject to this Part [Part IX: Goods and Services Tax], every recipient of a taxable supply made in a participating province shall pay to Her Majesty in right of Canada, in addition to the tax imposed by subsection (1) [imposition of goods and services tax], tax in respect of the supply calculated at the tax rate for that province on the value of the consideration for the supply.

Regulation 4 – Application For Rebate Paid By Director

CTRT - REG 4/Int.

Reference: Section 10(3)(a) of the Act; Bulletin HST Notice #10

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 limits the number of applications a person may submit when applying for a residential energy rebate in respect of a taxable supply of an energy product.

A person can submit, for each residential dwelling where qualifying energy products were used:

(a) one application per calendar year, or

(b) a maximum of three applications per calendar year where each application is for a rebate of at least $100 of the provincial component of the harmonized sales tax paid on eligible consideration.

Applicants must submit a separate energy rebate application form for each residential dwelling where qualifying energy products were used for a residential purpose.

Regulation 5 – Application For Reimbursement

CTRT - REG 5/Int.

Application For Reimbursement

Reference: Section 13 and 14 (1)(a) of the Act; Bulletin HST Notice #5 and #10

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 establishes that when an energy supplier claims a reimbursement of energy credits provided to persons entitled to the credit (see CTRT/SEC.13/Int.), the supplier must submit to the director a separate application form for each calendar month.

The reimbursement claimed each month must be equal to the amount of credits provided by the supplier in that month.

Regulation 5.1 – When Director Must Not Pay A Rebate

CTRT - REG 5.1/Int.

Reference: Regulation 3(d) and (e); Bulletin HST Notice #5 and #10; Section 165(2) of the Excise Tax Act (Canada)

Interpretation (Issued: 2010/10, Revised: 2011/03)

Effective July 1, 2010, B.C. Reg. 215/2010 limits the residential energy rebate payable by the director to a person included under Regulation 3(d), 3(i) to 3(iv). Under that subsection, diplomats, members of the consular corps and members of visiting forces and a spouse of those persons are not entitled to a rebate if they are able to claim a refund or rebate from the Canada Revenue Agency of the tax paid by that person under section 165(2) [Tax in a participating province] of the Excise Tax Act (Canada) in respect of the energy product.

Effective March 1, 2011, under B.C. Reg. 31/2011, paragraph (e) was added to Regulation 3. Accordingly, the director must not pay a residential energy rebate to the following British Columbia government entities:

Due to their inclusion in Schedule A of the Reciprocal Taxation Agreement (Canada - British Columbia) dated June 30, 2010, these entities must pay the tax imposed under section 165(2) of the Excise Tax Act (i.e., GST/HST) on purchases of taxable property and services. On subsequent application to the Canada Revenue Agency, the entities are entitled to a rebate of 100 per cent of GST/HST paid or payable by them.

Section 165(2) of the Excise Tax Act is as follows:

Subject to this Part [Part IX: Goods and Services Tax], every recipient of a taxable supply made in a participating province shall pay to Her Majesty in right of Canada, in addition to the tax imposed by subsection (1) [imposition of goods and services tax], tax in respect of the supply calculated at the tax rate for that province on the value of the consideration for the supply.

Regulation 6 – Energy Credit And Rebate Amount

CTRT - REG 6/Int.

Formula To Calculate Credit And Rebate Amount

Reference: Section 9(1) and 10(2) of the Act; Bulletin HST Notice #5 and #10; Section 165(2) of the Excise Tax Act (Canada); Section 28 of the South Coast British Columbia Transportation Authority Act

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 provides the formula to calculate the amount of residential energy credit or rebate to which an eligible person is entitled in respect of a taxable supply of an energy product under Section 9(1) and 10(2) of the Act.

The amount of the credit or rebate is equal to the provincial component of the harmonized sales tax (HST) paid on the eligible consideration that is attributable only to the residential use of the energy product in a residential dwelling.

The amount of the credit or rebate is determined by the following formula:

Credit/Rebate amount = eligible consideration x tax rate

“Eligible consideration” is the value of the consideration payable for the purchase of an energy product, including the carbon tax payable on the energy product.

Eligible consideration does not include: (a) service charges, (b) administrative charges, (c) equipment-related charges, and (d) the power levy established under section 28 of the South Coast British Columbia Transportation Authority Act (SCBCTAA).

The power levy applies only to the purchase of electricity in the South Coast Transportation Service Region.

Regulation 7 – Repayments To Government

CTRT - REG 7(1)/Int.

(1) Change In Use

Reference: Section 11(2) of the Act; Bulletin HST Notice #5 and #10

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 sets out the time limit in which a person must repay an amount to the government under Section 11(2) of the Act.

Section 11(2) of the Act establishes that a person is required to repay to the government of British Columbia some or all of an energy credit or energy rebate in the circumstance where the person receives a credit from an energy supplier or a rebate from the director, and subsequently uses any portion of that energy product, or permits any portion of the energy product to be used, for a use that is not a residential use in a residential dwelling (see CTRT/SEC.11(1) and (2)/Int.).

Repayment to the ministry is required by the 23rd day of the calendar month following the calendar month in which the energy was used for a non-residential use.

For example, if an energy product was used for non-residential use in August, the purchaser must repay that portion of the credit or rebate to the ministry by September 23.

Late payments are subject to interest charges.

The provision ensures that a person who receives an energy credit or energy rebate on an energy product purchased for residential use in a residential dwelling does not retain the benefit if the energy product is used for another purpose.

Regulation 7 – Repayments To Government

CTRT - REG 7(2)/Int.

(2) Reduction In Consideration

Reference: Section 12(2)(b) of the Act; Bulletin HST Notice #5 and #10

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 sets out the time limit in which a person must repay an amount to the government under section 12(2)(b) of the Act.

Section 12(2)(b) of the Act establishes that a person is required to repay to the government of British Columbia some or all of an energy rebate in the circumstance where the consideration payable on a purchase of an energy product to an energy supplier is reduced (see CTRT/SEC.12(2)(b)/Int.). An example of a reduction in the consideration payable is a rate reduction for the energy product.

Repayment to the ministry is required by the 23rd day of the calendar month following the calendar month in which the consideration for the energy product provided was reduced.

For example, the total consideration payable is $100 and the eligible consideration is $80. If there is a reduction in the service charges, there is no reduction in the value of the rebate claim. If there is a 10% reduction in the eligible consideration payable, then there is a 10% reduction in the value of the rebate claim. The adjustment was made in August. The purchaser must repay that portion of the rebate to the ministry by September 23.

Late payments are subject to interest charges.

The provision ensures that a person who receives an energy rebate on an energy product does not retain that benefit in its entirety if there is a subsequent reduction in the value of the eligible consideration payable.

Regulation 8 – Reimbursement Subsequent To Recovery Of Bad Debt

CTRT - REG 8/Int.

Reference: Sections 13(2) and 16(2)(c) of the Act; Regulation 6; Bulletin HST Notice #5 and #10; section 231(3) of the Excise Tax Act (Canada)

Interpretation (Issued: 2010/10)

Effective May 1, 2010,B.C. Reg. 113/2010 provides the formula to calculate the amount of reimbursement to which an energy supplier is entitled in respect of a taxable supply for the purposes of Section 13(2) of the Act.

Regulation 9 – Repayment Of Reimbursement By Registrant

CTRT - REG 9(1)/Int.

Reference: Section 16(2) of the Act; Bulletin HST Notice #5 and #10

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 sets out the time limit in which a person must repay an amount to the government under Section 16(2) of the Act.

Repayment to the ministry is required by the 23rd day of the calendar month following the calendar month in which the overpayment occurred.

A repayment can be made through an adjustment on an energy supplier’s subsequent month’s reimbursement claim if that claim is submitted no later than the 23rd day of the following month.

Late payments are subject to interest charges.

CTRT - REG 9(2)/Int.

Reference: Section 16(2)(c) of the Act; Bulletin HST Notice #5 and #10

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 provides the formula to calculate the amount of reimbursement that an energy supplier must repay to the government under section 16(2)(c) of the Act.

Regulation 10 – Document Setting Out Amount Of Energy Credit

CTRT - REG 10/Int.

Reference: Section 9 of the Act; Bulletin HST Notice #5

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 sets out the document requirements that an energy supplier must issue to a person when providing an energy credit under section 9 of the Act (see CTRT/SEC.9(1)/Int.).

The energy supplier must provide to the person a receipt, invoice or other document in respect of the taxable supply of the energy product. On that document, the amount of the energy credit provided to the person must be identified as a separate item from the harmonized sales tax shown on that invoice.

Regulation 11 – Records Respecting Provision Of Energy Credit

CTRT - REG 11(1) To (3)/Int.

Reference: Section 9 of the Act; Bulletin HST Notice #5

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 sets out the record retention requirements of an energy supplier that provides an energy credit under section 9 of the Act (see CTRT/SEC.9(1)/Int.).

Energy suppliers providing an energy credit must record each sale of the energy product, each volume sold, all charges relating to the supply, and the amount credited under section 9 of the Act.

Each entry in the record must be separate and distinguishable from other entries made in the record. The record must be kept at the registrant’s principal office or principal place of business in British Columbia.

Regulation 12 – Retention Of Records

CTRT - REG 12(1) To (3)/Int.

Reference: Section 9, 41 and 42 of the Act; Regulation 11; Bulletin HST Notice #5

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 provides that an energy supplier that provides a residential energy credit must retain their records (see Regulation 11) for a period of five years from the date the record is created or longer if the record is necessary for the purposes of an appeal to the minister or a court.

This regulation also provides an energy supplier with the ability to seek authorization from the director to destroy their records prior to the prescribed five years.

Regulation 13

CTRT - REG 13/Int.

REPEALED

Interpretation (Issued: 2010/10)

Effective July 1, 2010, B.C. Reg. 215/2010 repealed section 13, which established the method to calculate interest payable under the Act as of May 1, 2010, and introduced the regulation in its same form as Regulation 44. Regulation 44 is established for the purposes of the Act as of July 1, 2010.

Regulation 14

CTRT - REG 14/Int.

REPEALED

Interpretation (Issued: 2010/10)

Effective July 1, 2010, B.C. Reg. 215/2010 repealed section 14, which established offences under the residential energy credit and rebate program, and introduced an amended version of that regulation as Regulation 45 [offences]. Regulation 45 includes offences under both the residential energy credit and rebate program and the tax on designated property program.

Regulation 15 – Definitions For This Part

CTRT - REG 15/Aircraft Fuel/Int.

Aircraft Fuel

Reference: Section 4(1) (f) of the Act; Bulletin HST Notice #2

Interpretation (Issued: 2010/10)

Effective May 1, 2010, under B.C. Reg. 215/2010 a definition of “aircraft fuel” was introduced to establish the meaning as it relates to qualifying property under the Act.

This regulation establishes that aircraft fuel means fuel that is suitable, marketed and sold as fuel for use in aircraft engines.

CTRT - REG 15/Composite Property/Int.

Composite Property

Reference: Section 4(1)(a) of the Act; Bulletin HST Notice #2

Interpretation (Issued: 2010/10)

Effective May 1, 2010, under B.C. Reg. 215/2010 a definition of “composite property” was introduced to establish the meaning as it relates to qualifying property under the Act.

This regulation establishes that composite property means property that is wrapped, packaged or otherwise prepared for sale as a single product with the printed book. This may include a read-only reproduction of the printed book or material that makes reference to the printed book or a product that is specially designed for use by students enrolled in a qualifying course, a read-only medium or a right to access a website, or both of them, that contains material that is related to the subjected matter of the printed book.

CTRT - REG 15/Diesel Fuel/Int.

Diesel Fuel

Reference: Section 4(1)(f) of the Act; Bulletin HST Notice #2

Interpretation (Issued: 2010/10)

Effective May 1, 2010, under B.C. Reg. 215/2010 a definition of “diesel fuel” was introduced to establish the meaning as it relates to qualifying property under the Act.

This regulation establishes that diesel fuel does not include aircraft fuel, heavy fuel oil or fuel marketed or sold as a fuel for use as heating oil. Diesel fuel does include fuel marketed or sold as fuel for use in internal combustion engines of the compression-ignition type.

CTRT - REG 15/Gasoline/Int.

Gasoline

Reference: Section 4(1)(f) of the Act; Bulletin HST Notice #2

Interpretation (Issued: 2010/10)

Effective May 1, 2010, under B.C. Reg. 215/2010 a definition of “gasoline” was introduced to establish the meaning as it relates to qualifying property under the Act.

This regulation establishes that gasoline does not include aircraft fuel, but does include fuel marketed or sold as fuel for use in internal combustion engines.

CTRT - REG 15/National Standard/Int.

National Standard

Reference: Section 4(1)(b) of the Act; Bulletin HST Notice #2; National Standards of Canada, Garment Sizes, Canadian General Standards Board

Interpretation (Issued: 2010/10)

Effective May 1, 2010, under B.C. Reg. 215/2010 a definition of “national standard” was introduced to establish the meaning as it relates to qualifying property under the Act.

This regulation establishes that “national standard” means a standard of the National Standards of Canada as they read on January 1, 2010.

CTRT - REG 15/Printed Book/Int.

Printed Book

Reference: Section 4(1)(a) of the Act; Bulletin HST Notice #2; Section 259.1(1) of the Excise Tax Act (Canada)

Interpretation (Issued: 2010/10)

Effective May 1, 2010, under B.C. Reg. 215/2010 a definition of “printed book” was introduced to establish the meaning as it relates to qualifying property under the Act.

This regulation establishes that a printed book has the same meaning as section 259.1(1) of the Excise Tax Act as follows:

“printed book” does not include anything that is or the main component of which is

(a) a newspaper;

(b) a magazine or periodical acquired otherwise than by way of subscription;

(c) a magazine or periodical in which the printed space devoted to advertising is more than 5% of the total printed space;

(d) a brochure or pamphlet;

(e) a sales catalogue, a price list or advertising material;

(f) a warranty booklet or an owner’s manual;

(g) a book designed primarily for writing on;

(h) a colouring book or a book designed primarily for drawing on or affixing thereto, or inserting therein, items such as clippings, pictures, coins, stamps or stickers;

(i) a cut-out book or a press-out book;

(j) a program relating to an event or performance;

(k) an agenda, calendar, syllabus or timetable;

(l) a directory, an assemblage of charts or an assemblage of street or road maps, but not including

(i) a guidebook, or

(ii) an atlas that consists in whole or in part of maps other than street or road maps;

(m) a rate book;

(n) an assemblage of blueprints, patterns or stencils;

(o) prescribed property; or

(p) an assemblage or collection of, or any item similar to, items included in any of paragraphs (a) to (o).

CTRT - REG 15/Qualifying Course/Int.

Qualifying Course

Reference: Section 4(1)(a) of the Act; Bulletin HST Notice #2; Part III of Schedule V of the Excise Tax Act (Canada)

Interpretation (Issued: 2010/10)

Effective May 1, 2010, under B.C. Reg. 215/2010 a definition of “qualifying course” was introduced to establish the meaning as it relates to qualifying property under the Act.

This regulation establishes that a qualifying course is a course in which the supply of the service of instructing

(a) is an exempt supply included in Part III [Educational Services] of Schedule V [Exempt Supplies] of the Excise Tax Act, or

(b) would be an exempt supply under that Part except that the supplier of the service made an election under the Part.

CTRT - REG 15/Read-Only Medium/Int.

Read-Only Medium

Reference: Section 4(1)(a) of the Act; Regulation 15, definition of “composite property”; Bulletin HST Notice #2

Interpretation (Issued: 2010/10)

Effective May 1, 2010, under B.C. Reg. 215/2010 a definition of “read-only medium” was introduced to establish the meaning as it relates to composite property under the Act.

This regulation establishes that a read-only medium is designed for the read-only storage of information and other material in digital format.

Regulation 16 – Qualifying Property

CTRT - REG 16(1)To(6)/Int.

Qualifying Property

Reference: Section 4(1) of the Act; Bulletin HST Notice #2

Interpretation (Issued: 2010/10)

Effective May 1, 2010, under B.C. Reg. 215/2010, this regulation sets out the characteristics of the items included in the definition of “qualifying property” under the Act (see CTRT/SEC.4(1)/Int.). These items, as prescribed, are eligible for the point-of-sale rebate of the provincial portion of the harmonized sales tax. The point-of-sale rebates are administered by the Canada Revenue Agency.

The following list is a summary only and does not replace the legislation (see Regulations 15 and 16):

(1) Prescribed books: a printed book, audio book, printed scripture of any religion, or composite property;

(2) Prescribed children’s clothing and footwear: a garment designed for a baby (including bibs, bunting and receiving blankets); a child’s garment (for girls, of a size not greater that size 16; for boys, of a size not greater than size 20) other than a garment used exclusively in a sport or recreational activity or a costume; hosiery, socks, hat, tie, scarf, belt, suspenders, mittens and gloves designed for a baby and or child; and footwear designed for a baby or child with an insole length of 24.25 centimetres or less;

(3) Prescribed children’s diapers: a diaper, diaper insert or liner, training or rubber pant;

(4) Prescribed children’s car seats and car booster seats: a restraint system, booster seat or booster cushion that conforms to the Canada Motor Vehicle Safety Standards cited in the regulation;

(5) Prescribed feminine hygiene products: a product marketed exclusively for feminine hygiene purposes, and that is a sanitary napkin, tampon, sanitary belt, menstrual cup or similar product;

(6) Prescribed motor fuels: gasoline, diesel fuel, aircraft fuel.

Regulation 15 sets out definitions of the following words and phrases included in the above list: aircraft fuel, composite property, diesel fuel, gasoline, national standard, printed book, qualifying course, and read-only medium.

Regulation 17 – Time Of Payment Of Tax - Vehicles

CTRT - REG 17(1)To(4)/Int.

Vehicles

Reference: Sections 19, 20 and 21 of the Act; Bulletin CTR #001

Interpretation (Issued: 2010/10)

Effective July 1, 2010, B.C. Reg. 113/2010 establishes when tax must be paid under Sections 19, 20 and 21 of the Act.

(1)Tax on designated property acquired or brought into British Columbia (see CTRT/SEC.19&20/Int.) must be paid the earlier of the time an application is made for the registration or licensing of the vehicle or 23 days after the last day of the month in which the vehicle was purchased, brought, sent or delivered into British Columbia.

(2)Tax on registration of a vehicle brought into British Columbia must be paid when an application is made for the registration of the vehicle (see CTRT/SEC.21/Int.)

(3) Tax owing upon registration or licensing is paid to the Insurance Corporation of British Columbia.

(4) If tax is owing on designated property and it is not registered or licensed within 23 days of the purchase, the purchaser must self assess the tax owing and file a return to the director.

Regulation 18 – Time Of Payment Of Tax – Boats And Aircraft

CTRT - REG 18(1) And (2)/Int.

Boats And Aircraft

Reference: Section 19 of the Act; Bulletin CTR #001

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 establishes that tax on designated property under section 19, that is a boat or aircraft, must be paid within 23 days after the last day of the month in which the boat or aircraft was purchased.

If tax is owing on the boat or aircraft, the purchaser must self assess the tax owing and file a return to the director.

Regulation 19 – Prescribed Time – Section 22 Of The Act

CTRT - REG 19/Int.

Reference: Section 22 of the Act; Bulletin CTR #001

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 establishes that if tax is owing under section 22 of the Act as a result of a change in the use of the designated property, it must be paid within 23 days after the last day of the month in which the change in use occurred.

Regulation 20 – Depreciated Value

CTRT - REG 20/Int.

Depreciated Value

Reference: Section 24 of the Act; Bulletin CTR #001

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 provides a formula for determining the depreciated value for tax that is owing under section 24 (see CTRT/SEC. 24/Int.) of the Act where a vehicle is brought, sent or delivered into British Columbia, or there has been a change of use of the designated property (e.g. originally purchased exempt and subsequently used for a taxable purpose). The taxable value of the designated property is the greater of the following amounts:

• the depreciated value at the time of entry into British Columbia or change of use, or
• 50 percent of the purchase price.

The depreciated value is the sum of the price less the price multiplied by the depreciated value. The depreciated value is determined by:

• for designated property that is an aircraft, 25% for each year or 2.0833% for each month;
• for designated property that is a vehicle, 30% for each year or 2.5% for each month;
• for designated property that is a boat, 15% for each year or 1.25% for each month.

Regulation 21 – Designated Property Shipped Out Of Province By Seller

CTRT - REG 21(A)To(D)/Int.

Reference: Section 19 of the Act; Bulletin CTR #001

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 provides an exemption from tax under section 19 of the Act on designated property shipped out of the province by the seller.

The purpose of this regulation is to allow out of province residents to make an exempt purchase of designated property provided it is removed from British Columbia by the seller without any use within the province.

Regulation 22 – Exemption For Vehicles

CTRT - REG 22(A)To(C)/Int.

Reference: Section 19 of the Act; Bulletin CTR #001

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 provides an exemption from tax under section 19 of the Act (see CTRT/SEC.19/Int.) on vehicles purchased primarily for use outside of British Columbia, provided certain conditions are met.

Those conditions are:

(a) the vehicle is being purchased primarily for use outside of the province,

(b) the vehicle will not be registered or licensed under the Commercial Transport Act or Motor Vehicle Act or registered under the Motor Vehicle (All Terrain) Act, and

(c) the vehicle will not be used for a business purpose in British Columbia.

The regulation does not include a condition of residency. Accordingly, the vehicle may be purchased by either a resident or non-resident of British Columbia.

A vehicle does not qualify for exemption if the purchaser leaves the vehicle at a British Columbia location for storage purposes. To be eligible for the exemption, Regulation 22 requires that the vehicle be purchased primarily for use outside the province. Under the Act, storage is included in the meaning of use.

If the vehicle is being registered in British Columbia or British Columbia licence plates are placed on the vehicle at the time of purchase, the tax on designated property on the purchase price of the vehicle will be collected by the Insurance Corporation of British Columbia (ICBC).

If a person obtains a temporary operating permit (TOP) from ICBC for the purpose of removing the vehicle from the province, the vehicle is exempt from tax provided all the conditions for exemption under Regulation 22 are met. The TOP, sometimes referred to as a short term licence, is not a registration or licence under provincial legislation.

Regulation 23 – Purchase By New Corporations

CTRT - REG 23(1)To(6)/Int.

Reference: Section 19 of the Act; Bulletin CTR #001

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 establishes that if a new corporation purchases designated property in British Columbia on, or before, the day the corporation starts to carry on business, the corporation may qualify for an exemption.

To be eligible, the following conditions must be met:

• The designated property is purchased on, or before, the day the new corporation beings to carry on business;
• The new corporation is a goods and service tax/harmonized sales tax (GST/HST) registrant at the time the designated property is purchased;
• The designated property is used for commercial activity by the new corporation.
• The seller paid or was exempt from tax on designated property, the provincial component of the HST or social service tax; and
• The seller continues to wholly own and control the corporation for at least eight months after the purchase date of the designated property.

If the new corporation meets all of the other conditions for the exemption, the exemption may be provided before the end of the eighth month waiting period. Subsequently, the corporation may be subject to an audit to ensure this condition was met.

Regulation 24 – Boat Used By Commercial Fisher

CTRT - REG 24(A)To(C)/Int.

Reference: Section 19 of the Act; Bulletin CTR #001

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 establishes that if a person fishes for commercial purposes under the authority of the Fisheries Act (Canada), the purchase of designated property that is a boat in British Columbia under Section 19 of the Act is exempt from tax.

The commercial fisherman must have a gross income in the immediately preceding year from commercial fishing of not less than $10,000 or at least 51% of the total gross income for that year. In addition, the boat must be only used in catching fish for human consumption.

Regulation 25 – Transfer Due To Dissolution Of Marriage Or Relationship

CTRT - REG 25(1)And(2)/Int.

Reference: Section 19, 20 and 21 of the Act; Bulletin CTR #001

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 establishes that the transfer of designated property under Section 19, 20 or 21 of the Act, from a spouse or former spouse, is exempt from tax if the transfer is acquired under a written separation agreement, a marriage agreement referred to in section 61 of the Family Relations Act or an order of a court.

The regulation establishes that spouse means a person who is married to another person or lived with another person in a marriage-like relationship, including a marriage-like relationship between persons of the same gender, for a period of at least two years.

Regulation 26 – Vehicles Modified To Accommodate An Individual With A Disability

CTRT - REG 26(A)And(B)/Int.

Reference: Section 19, 20 and 21 of the Act; Bulletin CTR #001

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 establishes that a vehicle acquired for transporting an individual with a wheelchair and manufactured or modified to facilitate the placement or transportation of a wheelchair in the vehicle is exempt from tax on designated property.

A vehicle equipped with auxiliary driving controls to facilitate the operation of the vehicle by an individual with a disability is also exempt from tax on designated property.

In either case, the vehicle must not be used for a business, commercial or industrial purpose.

Regulation 27 – Boats And Aircraft Brought Into British Columbia

CTRT - REG 27/Int.

Reference: Section 20 of the Act; Bulletin CTR #001

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 establishes that the purchase of designated property at a private sale that is a boat or aircraft is exempt from designated property tax under Section 20 of the Act if it is brought into British Columbia from another province or from outside Canada.

The intention of this regulation is to ensure the purchaser is not paying tax twice on the same boat or aircraft as there may be an obligation to pay the federal and provincial components of the harmonized sales tax when the boat or aircraft is brought into British Columbia from another province or from outside Canada.

Regulation 28 – Specified Motor Vehicle

CTRT - REG 28/Int.

Reference: Section 20 and 21 of the Act; Regulation 1-definition of “specified motor vehicle”; Bulletin CTR #001

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 establishes that the purchase of designated property at a private sale that is brought into British Columbia and is not a specified motor vehicle is exempt from tax under Section 20 or 21 of the Act.

The intention of this regulation is to ensure that the meaning of “vehicle” under the Consumption Tax Rebate and Transition Act (see CTRT/SEC.1/VEHICLE/Int.), and the intended imposition of tax on designated property that is a vehicle, parallels the meaning of “specified motor vehicle” under the Excise Tax Act (Canada) (see CTRT/REG 1/SPECIFIED MOTOR VEHICLE/Int.). Generally, specified motor vehicle includes all motor vehicles except for race cars and horse-drawn carriages.

Regulation 29 – Vehicle Assembled Outside British Columbia

CTRT - REG 29(A)And(B)/Int.

Reference: Section 20 and 21 of the Act;Bulletin CTR #001

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 establishes that a specified motor vehicle is exempt from tax under Section 20 or 21 of the Act if the vehicle was assembled from parts acquired outside British Columbia before the vehicle was brought, sent or received in British Columbia.

The intention of this regulation is to avoid double taxation as tax would have already been paid on the component parts used in the assembly of the vehicle.

Regulation 30 – Gifts

CTRT - REG 30(A)And(B)/Int.

Reference: Section 20 and 21 of the Act; Bulletin CTR #001

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 establishes that designated property brought, sent or delivered in British Columbia is exempt from tax under Section 20 or 21 of the Act if the designated property was received as a gift and the person who gave the gift paid British Columbia social service tax (PST), tax on designated property, the provincial portion of the harmonized sales tax or sales tax imposed by another province.

The tax paid on the designated property must not eligible for a refund under the Act, the Excise Tax Act (Canada) or the laws of another province.

Regulation 31 – Inheritance

CTRT - REG 31/Int.

Reference: Section 20 and 21 of the Act; Bulletin CTR #001

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 establishes that designated property received as part of the distribution of a deceased’s estate is exempt from tax under Section 20 or 21 of the Act.

Regulation 32 – Temporary Use

CTRT - REG 32(A)And(B)/Int.

Reference: Section 20 and 21 of the Act;Bulletin CTR #001

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 establishes that if designated property is brought into British Columbia and sent out within 30 days of its date of entry, it is exempt from tax under Section 20 or 21 of the Act provided it is in the province for less than 30 days in a calendar year.

The intention of this regulation is to allow for the temporary use of designated property within British Columbia for less than 30 days per twelve month period which would otherwise be taxable when brought into the province under Section 20 or 21 of the Act.

Regulation 33 – Tax Paid Under The Act Or Social Service Tax Act

CTRT - REG 33(1)And(2)/Int.

Reference: Section 20 and 21of the Act; Bulletin CTR #001

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 establishes that the purchase of designated property is exempt from tax under Section 20 or 21of the Act if tax had previously been paid by that person under the Act or under the Social Services Tax Act and the person is not eligible for a refund in respect of the tax previously paid.

The intention of this regulation is to avoid a purchaser from paying tax more than once on the same item.

Regulation 34 – New Resident’s Effects

CTRT - REG 34(1)To(3)/Int.

Reference: Section 20, 21 and 22 of the Act; Bulletin CTR #001

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 establishes that new residents to British Columbia are entitled to bring their designated property for their own use into British Columbia exempt from tax under Section 20 or 21of the Act.

The new resident must have owned, physically possessed and used the item for at least 30 days prior to taking up residence in the province, and that item must arrive into British Columbia within six months of becoming a resident of British Columbia, or would have arrived within that time if not for circumstances that made it impractical.

In addition, if designated property is exempt as new resident’s effects under this regulation and subsequently converted to business use, it remains exempt from tax payable under Section 22 of the Act if the business use does not occur within the first six months after the property was brought, sent or delivered into British Columbia and the following conditions are met:

• satisfactory evidence is provided that sales tax was paid in another province and the new resident is not eligible for a refund of the tax paid, and
• the designated property was owned, physically possessed and used by the individual for more than three years before moving to British Columbia.

The regulation is consistent with the new resident’s effects under section 3.12 of the Social Service Tax Act Regulations (see SSTA/REG.3.12).

Regulation 35 – Refunds Authorized

CTRT - REG 35/Int.

Reference: Section 30(a) of the Act; Bulletin CTR #001

Regulation 36 – Returns

CTRT - REG 36(A)To(C)/Int.

Reference: Section 19 of the Act; Bulletin CTR #001

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 establishes that the director may refund tax paid under section 19 of the Act if ownership of the designated property was returned or transferred to the previous owner and the purchase price was refunded within 30 days of the sale.

R.1 Refunds of TDP on Designated Property Returned After 30 Days from the Date of Sale (Issued: 2011/03, Revised: 2011/04)

There may be circumstances where a purchaser attempts to return designated property within 30 days from the date of sale to the previous owner ("seller") and the seller is not willing to accept the return

By the time a settlement is reached, with the seller taking back the designed property and the purchaser receiving the refund of the full purchase price, more than 30 days may have passed since of the date of the sale. In these situations, the ministry may provide a refund of TDP where designated property is returned more than 30 days from the date of sale under the following circumstances:

1. The purchaser must provide evidence that they initiated action to pursue the return of the designated property to the seller within 30 days from the date of sale. For example, supporting documentation may include but is not limited to:The purchaser must provide evidence that the designated property was returned.

   A copy of a demand letter sent by a lawyer to the seller by registered mail,

   A copy of a notice of claim filed with the Small Claims Registry and a notice of claim served to the defendant (Small Claims Court), with proof of a filing fee being paid, or

   A copy of a court order or a mediation agreement stating the purchaser attempted to return the designated property within 30 days from the date of sale in a statement of facts.

2. For a registered vehicle, a copy of the ICBC Transfer Tax Form (APV9T) showing the transfer back to the seller.

3. The purchaser must provide proof that they received a refund of the full purchase price. Supporting documentation may include:

   ​A bank statement showing the deposit in the amount of the full purchase price of the designated property around the time of the return.

A copy of a cheque payable to the purchaser for the full purchase price of the designated property from the seller.

A signed written statement from the seller confirming that the designated property was returned and the full purchase price was refunded.

Regulation 37 – Designated Property Sent Out Of British Columbia Within 30 Days Of Purchase

CTRT - REG 37(A)To(B)/Int.

Reference: Section 19 of the Act; Bulletin CTR #001; Division IV.1 of Part IX of the Excise Tax Act (Canada)

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 establishes that the director may refund tax paid under Section 19 of the Act if the designated property was sent out of British Columbia within 30 days of the purchase to be used primarily outside British Columbia and the applicant paid tax to another jurisdiction that imposes a sales tax or the provincial component of the harmonized sales tax.

Regulation 38 – Designated Property Resold Within 7 Days

CTRT - REG 38/Int.

Reference: Section 19 of the Act; Bulletin CTR #001

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 establishes that the director may refund tax paid under section 19 of the Act (see CTRT/SEC.19/Int.) if the designated property is sold to another person at a sale in British Columbia within seven days after the purchaser had purchased the designated property.

Regulation 39 – Boat Purchased By Commercial Fisher

CTRT - REG 39(A)To(C)/Int.

Reference: Section 19 of the Act; Bulletin CTR #001; Fisheries Act (Canada)

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 establishes that the director may refund tax paid under section 19 of the Act (see CTRT/SEC.19/Int.) on designated property that is a boat if the purchaser will fish for commercial purposes under the authority of the Fisheries Act (Canada) in the 12 months subsequent to the purchase.

The person must have a gross income from commercial fishing in the year after the purchase of the boat of not less than $10,000 or at least 51% of the total gross income for that year. The boat must be only used in catching fish for human consumption.

This regulation allows a commercial fisher who does not meet the gross income requirement under paragraph (b) of Regulation 24 to obtain a refund of tax paid after that income requirement is met.

The intention of this regulation is to allow a person new to commercial fishing eligibility for a refund of tax paid on the boat, to ensure similar tax treatment on purchases of fishing boats by new and experienced commercial fishers.

Regulation 40 – Records Respecting Designated Property

CTRT - REG 40(1)To(3)/Int.

Reference: Section 26 of the Act; Regulation 27

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 provides the record retention requirements for a person that is exempt from tax in respect of designated property other than by reason of an exemption under Section 26 of the Act (see CTRT/SEC.26/Int.) or Regulation 27.

This regulation clarifies that the person claiming the tax exemption in respect of the designated property must keep all records relating to the purchase, bringing, sending, or delivery into British Columbia.

This regulation requires that records must be kept by the person at the principal premises in British Columbia where the records of the person are kept.

Regulation 41 – Retention Of Records

CTRT - REG 41(1)To(3)/Int.

Reference: Section 41 and 42 of the Act; Regulation 40

Interpretation (Issued: 2010/10)

Effective May 1, 2010, B.C. Reg. 113/2010 establishes that an individual who is required to keep records under Regulation 40 must retain their records for a period of five years from the date the record is created or longer if the record is necessary for the purposes of an appeal to the minister or court.

This regulation also provides an individual with the ability to seek authorization from the director to destroy their records prior to the five years.