Transition Tax Ends for Motor Vehicles, Heavy Equipment

Finance Minister Don Downe announced today the end of Nova Scotia's Transition Tax on new and used motor vehicles and heavy equipment.

The tax was announced three years ago as a temporary measure. It was implemented on April 1, 1997, at a rate of two per cent. On April 1, 1998, the rate was dropped to one per cent and, as originally scheduled, the tax has been removed entirely effective April 1, 1999.

"This tax was an important element in the province's plan to cover the revenue losses from the move to the harmonized sales tax system," said Mr. Downe. "It was planned to be a temporary move, and I am pleased to say that today, as scheduled, the tax has ended."

When the tax was implemented two years ago, it raised $15.5 million. The rate was lowered to one per cent in 1998-1999, and the tax's revenue forecast for the same year is $9.5 million.

"Clearly businesses and consumers in this province, whether they are buying a $1,000 used car or a $250,000 piece of construction equipment or on a lease, they will all be saving money now this tax is gone," Mr. Downe said.

The end of this tax brings Nova Scotia in line with Newfoundland and New Brunswick on tax treatment for motor vehicles.