If you reside in Ontario or British Columbia and you are considering purchasing an aircraft through a private sale, then do it before July 1, 2010.
In general, when aircraft are sold in a private sale, in non-HST provinces, only the PST is applicable, except in Alberta, of course, which has no PST. In these private sale cases the GST is not collected at all.
GST is collected when you buy a used airplane from any GST registrant, such as a dealer, aircraft broker or if the plane is owned by a company that is a GST registrant. The provincial governments have the legal right to collect provincial taxes on used and new aircraft whenever they are sold in or brought into their jurisdiction.
Unfortunately when the HST agreements were put together in Nova Scotia, New Brunswick and Newfoundland, the provincial governments agreed to collect the full HST on these purchases. Buying a used airplane is more expensive when you live in an HST province, and as of July 1, the tax burden will jump from eight per cent to 13 per cent in Ontario and from seven per cent to 12 per cent in British Columbia when they adopt the HST versus, for example, five per cent in Saskatchewan or zero in Alberta where HST does not apply.
COPA has been focussing our efforts on letting COPA members know that they are likely to get a provincial tax bill when they buy a used aircraft in Canada (except Alberta) and we encourage you to be prepared for it.
With the adoption of the HST in Ont. and B.C., buyers can expect an even bigger tax bill. For information on the non-HST provinces and the PST rate go to these links
Taxes in Alberta:
PST in Saskatchewan: www.finance.gov.sk.ca/taxes/pst/
PST in Manitoba: www.gov.mb.ca/finance/taxation/index.html
For more information on money issues in aviation go to your COPA website at www.copanational.org/Money%20Issues.cfm