OTA to address MJVT concerns with Finance Minister

TORONTO, (Aug. 11, 2004) — The Ontario Trucking Association will meet with provincial Finance Minister Greg Sorbara later this month to discuss the association’s concerns about the Multi-Jurisdictional Vehicle Tax (MJVT) and to seek his support for the implementation of appropriate remedies.

The OTA says already met with Ministry officials to discuss two issues related to the MJVT: The lease-buy out valuations and ownership change and the exit tax.

The trucking group wants the Ministry to acknowledge a change in ownership has occurred during a lease buy-out transaction, that carriers be allowed to utilize a certified appraisal option to value their vehicle following a lease buy-out for MJVT tax purposes or other transactions.

Currently under the MJVT all trucking companies that exercise the lease buy-out option on their tractors are referred exclusively to Ministry of Finance valuation schedules. These same transactions are also not recognized as ones in which a transference of ownership from the lessor to the lessee has occurred.

OTA says it finds it difficult to accept the Ministry’s view that a legal ownership change has not occurred during a lease buy-out transaction. If such a change in ownership status were to be granted to MJVT lease buy-out transactions, tax equity would be restored to the used truck market, the OTA says.

OTA recommends that the Ministry allow a complimentary system in determining the value of used vehicles. Currently, the MOF relies solely on a ministry valuation schedule, which the OTA says is the exclusive method to determine the value of lease buy-outs. The OTA wants the MOF to allow carriers exercising lease buy-outs to utilize the option of presenting to the Ministry of Transportation an accredited third-party appraisal to determine current market value of the vehicle for MJVT purposes.

As for the exit tax, the OTA says the overriding tax policy objective is not an issue. However, based on preliminary data analysis involving OTA members and Ministry of Finance officials, it is unclear whether the tax is treating longer-term original vehicle MJVT owners fairly, the OTA says.

OTA is concerned that original owners of model year vehicles pay a disproportionate amount of exit tax and MJVT over the life of the vehicle compared to purchasers and MJVT registrants who purchase the same vehicle at a later date but exit the system at the same time as an original owner.

OTA has asked the Minister to review this matter to ensure that the principals of the exit tax are adhered to without penalizing long term MJVT taxpayers.