News Release Archive
FINANCE--MUNICIPALITIES TO GET SOME RELIEF ON VEHICLE TAX ----------------------------------------------------------------- Nova Scotia municipalities worried about the impact of new taxes on vehicle purchases are being given some relief, Finance Minister Bill Gillis announced today. "Municipalities will enjoy an exemption with respect to the two percent transition tax," Mr. Gillis said. "I believe any additional burden to this sector is not warranted," he added. Last week, the Finance Department announced that the new tax rate on both new and used vehicles and mobile heavy equipment would effectively be 17 per cent on April 1, 1997, in most cases, down from the current 18.77 per cent now. The taxes include a 15 per cent HST and a 2 per cent transitional tax which falls to 1 per cent April 1, 1998 and disappears entirely on April 1, 1999. Municipalities, however, will only pay the HST. Mr. Gillis said the Union of Nova Scotia Municipalities felt the transition tax on new vehicles would increase the cost of governing by several hundred thousand dollars collectively for municipalities across the province. "The transition tax was meant to balance auto and heavy equipment industry concerns that vehicle sales would stop in the months leading up to harmonization, as customers awaited the benefit of lower taxes," the minister said. He said it was not meant to have a negative impact on municipalities. A letter has gone out from the minister to the municipalities explaining the decision. Some groups that continue to be exempt from the transitional tax include forestry companies, farmers and the non-renewable resource industry. -30- Contact: Bruce Cameron 902-424-8787 or 902-499-8849 (cell) trp Feb. 17, 1997 - 4:30 p.m.