You mentioned your dealer charging you lux tax on your ceramic. I posted this before but the forum search didn’t find it. My take from the wording makes me think that as you said that they should have taken payment and then you come back later to have the ceramic applied . It states lux tax will apply to improvements totalling “ at least “ $5,000 . It would apply to improvements made in connection to the sale .
Having improvements made to subject vehicles
The luxury tax could apply when improvements are made to subject vehicles, as set out in sections 29 to 32. According to subsection 8(1), an
improvement to a subject vehicle is the provision of either:
- tangible personal property that is installed in/on or affixed to the subject vehicle
- a service that modifies the subject vehicle and is physically performed on the subject vehicle
Improvements made to subject vehicles include car modifications. Examples of improvements made to a subject vehicle include stereo system installations, body kit installations, engine upgrades, vehicle wrap installations and window tinting services.
The luxury tax on improvements will typically only apply to improvements made to subject vehicles that were already subject to the luxury tax. However, in the event that improvements are made in connection with the sale of a subject vehicle, the calculation of the luxury tax payable on the sale of the subject vehicle would take into account the cost of the improvements.
The luxury tax on improvements will apply to improvements that total at least $5,000 made during the improvement period of the subject vehicle as determined under paragraphs 29(1)(a) and 30(1)(a). The luxury tax on improvements will be payable on the day following the improvement period.
If a sale triggered the luxury tax on a subject vehicle, the purchaser would be liable for any luxury tax payable on after-sales improvements made to that subject vehicle. Otherwise, the person that was liable for the luxury tax on a subject vehicle would be liable for any luxury tax payable on improvements made to that subject vehicle.
Although it also says that improvements made up to a year after sale are subject to the tax , I think the key thing here is the “ total at least $5,000 . “ part. Maybe one of the forum members who are lawyers could chime in with an interpretation.
Here is the link to the entire lux tax information.
www.canada.ca