Just back date a bill of sale. He can probably get away with it ONCE but the CRA will catch on if you tried it twice.
My buddy didnt pay Luxury Tax on his Z06 but he legit put down $500 on one 2 years ago and kept the VISA slip and receipt.
2024 Ordering Strategy to save on both taxes
- Thread starter Mr.Corvette
- Start date
My buddy didnt pay Luxury Tax on his Z06 but he legit put down $500 on one 2 years ago and kept the VISA slip and receipt.
My deposit was paid on May 2022. Can I avoid the luxury tax? It works out to be $800 anyways but would be nice to not pay.
Model year change overs are not price protected but it's only $20 plus all the tax difference.
I checked again this afternoon. The fact that everyone was unable to place an order into the system for a Z06 or E-Ray buy the end of 2021 and get an order number will make us by definition required to pay the luxury tax. Same thing for C9. If Morgan found a way to order a Z06 before July 28, 2022 which I believe was the first day you could order a Z06 in Canada, and order his car before the end of 2021 to be eligible, I want to hear about it as I am in the same position with my deposit!
Scotty, let me know if he continues to get away with not paying the luxury tax after the government audits his deal and looks for his original bill of sale on a car that couldn't be ordered in 2021. I put a $2000 deposit down on mine in May 2021 and have been sold I am out of luck because of the rules.
The answer is No. Your deposit would have to have been in 2021 and at that point you couldn't order the car to prove that you had an order already in the system.
Any Z06 in Canada was going to have a luxury tax of $5,640 on a 1LZ coupe. After the price increase that amount on the same car is up to $9,660. Were you looking at the US prices instead of the Canadian ones for your calculations?
According to the guys that I deal with, if you had a signed bill of sale and a visa deposit with the slip dated before the cut off, you will be exempt from paying Luxury Tax. My Ford dealer buddy told me the exact same thing as he just delivered a Bronco Raptor and he sent all the docs to the CRA for confirmation and they told him that the buyer would not have to pay. The dealers are probably just covering their azz by saying you have to pay it as they dont want to be chasing you down 2 years from now trying to get the LT $ from a customer if they get audited and charged back.
Were they able to actually order the Bronco Raptor in 2021 and enter the vehicle into the system? If they could they are correct no LT is payable. If they couldn't order that model vehicle at the time, my understanding is that is where the problem is.
Nope. Bronco was not able to be "ordered". The CRA was satisfied with the VISA slip and BOS dates lining up.
Hey Scott. Was just curious if you had a chance to talk with Morgan about how he is or thinks he can keep from paying the Luxury tax. Not that it affects me, but I am sure others could use this information like @GCrone who placed a deposit Sept 2021 for his Stingray. There have been many that have not been so lucky in getting around it. It would be great to help others if he has insight as a dealer.
Morgan was a no show at our the CWO Corvette club event on Saturday. GCrone should be fine, as in 2021 you could put an order for the Stingray into the system and generate a bill of sale with an order number. Along with his time stamped deposit in 2021, he can avoid paying the luxury tax.
Are you coming to the Finch takeover show at 10 am on Saturday September 16th our club is hosting? We can ask him together. If there is a way of ignoring the required step of being able to place an order for the car which you couldn't do for a Z06 or E-Ray before the deadline, I want to hear about because I also have a Z06 deposit from 2 1/2 years ago in 2021 and I have been told avoiding the tax isn't possible without all the requirements being met.
I will see what I can do to make the show. I had reached out to Morgan a month and a half ago regarding when the show was being hosted, but I never did get a reply from him. I will let you know if I can swing it.
That's very interesting. I have a signed vehicle purchase agreement dated Jan 9, 2021 for my ERay which I now have a signed Deal Summary and they are in the process of trying to load it up to GM. They have been trying for the last 2 weeks and it will not take the order yet. I will have to talk to my tax accountant to see if there is a way not to pay the Luxury Tax. The luxury tax on my Deal Summary is $15,236.80 which I would really like to keep in my pocket plus the additional HST. I will let you guys know what I find out.
How did you sign a purchase agreement when there was no information on the E-Ray whatsoever in 2021? As far as I’m aware, there needs to be a bill of sale signed with the proper figures. Pricing was just announced last year.
It says on it Model Corvette, Body Style - GS, ERAY, Base. Back in 21 there were rumors about a GS or ERAY based on some news reports etc. So I took a chance on what I wanted paid my deposit $5K which is on the Vehicle purchase agreement. That's when the so called list started not only at this dealership but many of the ones in the US did it to. How do you think the guys that have already put their name on the lists for ZR1 and ZORA. The bill of sale is signed but it says that I will pay FULL MSRP, Colors, Options and Pricing to be determined once available from GM. Customer understands vehicle will take longer that 90 days to deliver. Signed by me and sales person. This process is very common now.
I don't this worked or is going to work. I checked with my Tax guy and the CRA and it is based on the date of Manufacture (see below, from the CRA web site)
Vehicles subject to the luxury tax
The luxury tax will apply to vehicles that meet the definition of subject vehicle under the Act and are priced or valued above the $100,000 price threshold, unless an exception applies.Under subsection 2(1), subject vehicle means a motor vehicle that meets all of the following conditions:
- it is designed or adapted primarily to carry individuals on highways and streets
- it has a seating capacity of not more than 10 individuals
- it has a gross vehicle weight rating that is 3,856 kg or less
- it has a date of manufacture after 2018
- it is designed to travel with four or more wheels in contact with the ground
Ok here is a suggestion . The price before taxes is a MSRP . Instead of using your trade against the full amount of the MSRP ask for a discount on the MSRP and then factor in your trade. That's say the MSRP is $125,000 . Ask for a discount of $10,000 on the MSRP and reduce your trade in value by $10,000. This will save you $2000 of Luxury tax. MSRP has always been a negotiable price.
Here's the response from a GM dealer. To the CRA what you are describing here is fraud. Yes, there is a discount on the MSRP of a vehicle if you qualify for Preferred Pricing and your company is on the list, like TD Bank for example. Your discount will be removed from MSRP and luxury tax will then be calculated on the sale price of the vehicle, plus freight, dealer admin fees and extended warranty. Trades don't come into effect with regards to luxury tax. Dealers are required to show an ACV (actual cash value) of your trade as they get audited by GM every two years. After that they get audited by CRA. No General Manager would sign off on your idea as it will get them in trouble with the local auto authority (in Ontario OMVIC) and corporate. There is one dealer in Ontario that is currently being audited by GM and by doing things that don't comply with corporate guidelines, looks like the will be paying a $400,000-$500,000 fine back to GM for doing this sort of thing before the CRA comes in.
Dealers have to charge luxury tax on the bottom line price before trades and HST because HST is also charged on luxury tax.
It's a great idea you have but doing what you suggest could cost the dealership it's franchise agreement I was told and will certainly be caught by a GM audit creating steep fines from GM.
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