Select Luxury Items Tax Act — S-8.35 18
Tax — sale of subject item 18 (1) Subject to this Act, if a vendor sells a subject item to a purchaser and the taxable amount of the subject item exceeds the price threshold in respect of the subject item, tax in respect of the subject item is payable to Her Majesty in right of Canada in the amount determined under section 34 . Liability for tax — vendor or purchaser (2) The tax under subsection (1) in respect of a subject item sold by a vendor to a purchaser is payable by (a) the purchaser, in the case where the vendor is (i) Her Majesty in right of Canada or a province, (ii) an agent of Her Majesty in right of Canada or a province, (iii) an Indigenous governing body, (iv) a person entitled to tax relief privileges under the Foreign Missions and International Organizations Act for the tax payable under subsection 165(1) of the Excise Tax Act in respect of the sale, or (v) a prescribed person; and (b) the vendor, in any other case. When tax payable (3) The tax under subsection (1) becomes payable at the time at which the sale is completed. Taxable amount (4) Subject to subsections (5) to (7), the taxable amount of a subject item sold by a vendor to a purchaser is, for the purposes of this section and for the purposes of determining under section 34 the amount of tax payable under this section, the amount determined by the formula A + B + C where A is the value of the consideration for the sale of the subject item; B is the total of all amounts, each of which is the value of the consideration for an improvement in respect of the subject item that is provided by the vendor, or a person that does not deal at arm’s length with the vendor, in connection with the sale of the subject item, but only to the extent that the amount is not included in the determination of A; and C is a prescribed amount. Taxable amount — lease by non-arm’s length purchaser (5) Subject to subsection (7), if a vendor sells a subject item to a purchaser that does not deal at arm’s length with the vendor, if the purchaser and another person enter into a lease, licence or similar arrangement (in this subsection referred to as the “lease agreement”) that provides the other person with the right to use the subject item for a period of at least six months and if the lease agreement is entered into in connection with the sale, the taxable amount of the subject item is, for the purposes of this section and for the purposes of determining under section 34 the amount of tax payable under this section, the amount determined by the formula A + B where A is the greatest of (a) the value of the consideration for the sale, (b) the retail value of the subject item at the time at which the other person first has the right to use the subject item under the lease agreement, and (c) the retail value of the subject item at the time at which possession of the subject item is transferred to the other person under the lease agreement; and B is a prescribed amount. Taxable amount — lease to vendor by purchaser (6) Subject to subsection (7), if a vendor sells a subject item to a purchaser, if the purchaser and the vendor enter into a lease, licence or similar arrangement (in this subsection referred to as the “lease agreement”) that provides the vendor with the right to use the subject item for a period of at least six months and if the lease agreement is entered into in connection with the sale, the taxable amount of the subject item is, for the purposes of this section and for the purposes of determining under section 34 the amount of tax payable under this section, the amount determined by the formula A + B where A is the greater of (a) the value of the consideration for the sale, and (b) the retail value of the subject item at the time at which the vendor first has the right to use the subject item under the lease agreement; and B is a prescribed amount. Taxable amount — regulations (7) For the purposes of this section and for the purposes of determining under section 34 the amo