Nova Scotia ends transition tax for motor vehicles

HALIFAX (April 8) — Temporary taxes are rarely temporary, it seems. But Nova Scotia is following through with a promise to phase out its transition tax on new and used motor vehicles and heavy equipment.

The tax was implemented two years ago to cover projected revenue losses from the province’s move to the harmonized sales tax system. In 1997, the rate was 2%; on April 1, 1998, the rate was dropped to 1%. It was removed entirely effective April 1, 1999, as scheduled.

The tax was expected to raise $25 million over the two years, according to the Nova Scotia Dept. of Finance.

“Clearly businesses and consumers in this province, whether they are buying a $1000 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,” said Finance Minister Don Downe.

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