Tesla is set to begin Cybertruck deliveries in Canada on Monday, and with just over 48 hours to go until they start in British Columbia, the government has told us the electric truck will be subject to the province’s luxury tax, which can amount to as much as 20% of the purchase price.
Back when Tesla announced Canadian Cybertruck pricing in August, starting at C$137,990, one of the first questions everyone asked whether it was going to be subject to the federal luxury tax. This tax was introduced in 2022 and is applicable on vehicles priced above C$100,000. However, based on the federal government’s definitions, only vehicles with a gross vehicle weight rating (GVWR) of 3,856kg (8,501lbs) or less are subject to the tax. That meant the Cybertruck was exempt from the tax, and Tesla quickly updated and removed it from their online configurator, which in the case of the Cybertruck, would have been a substantial amount, 20% of the price above C$100,000.
But there were also questions about another luxury tax, this one at the provincial level in British Columbia. In BC this tax is applicable on zero-emission vehicles (ZEVs), and is based on the entire purchase price. According to the rules in BC, the luxury tax is on a sliding scale, with ZEVs purchased for under C$75,000 subject to the regular 7% PST. ZEVs priced above that amount are subject to more tax, increasing incrementally up to 20% PST for vehicles C$150,000 and over.
Just like the federal luxury tax though, BC also has definitions around what is considered a passenger vehicle, but unfortunately they differ on how to classify the Cybertruck. According to the Provincial Sales Tax (PST) bulletin on vehicles, a passenger vehicle is defined as “a motor vehicle designed primarily as a means of transport for individuals, including trucks and vans that are ¾-ton or less. Trucks and vans larger than ¾-ton, camperized vans, motor homes, buses, ambulances, hearses and motorcycles with engines of 250 cc or less are not passenger vehicles. For more information on what is a passenger vehicle, see Bulletin PST 116, Motor Vehicle Dealers and Leasing Companies.” (emphasis added by Drive Tesla).
Looking further into Bulletin PST 116, it talks about a vehicle’s series as the determining factor of size. “Absent other evidence, we will consider the first digit in a vehicle’s series as the determining factor of the size of the vehicle, as follows:
1 = ½-ton
2 = ¾-ton
3 = 1-ton”
As you can see, the province’s legislation is quiet about weight and only talks about series numbers to determine whether it is a passenger vehicle. Since the Cybertruck has no series number, the only metric we can go by is the GVWR. Based on our research relating series number to weight, 3/4-ton pickups are those with a GVWR from 8,510lbs to 10,000lbs. According to Tesla’s owners manual, the lightest Cybertruck has a GVWR of 8,834lbs (4,007kg), up to 9,169lbs (4,159 kg), falling within this range.
Drive Tesla contacted the BC Ministry of Finance all the way back in August when Cybertruck pricing was announced to confirm its status as it relates to the provincial luxury tax. After three months of waiting they were finally able to respond to us today. We’ll include their response in its entirety at the end of this article, but they confirmed that the Cybertruck is considered a passenger vehicle, and a zero-emission vehicle (ZEV), and is therefore subject to the higher taxes.
For Cybertruck buyers in BC, this is not a small amount of money. Buyers of the Dual-Motor Foundation Series will be subject to 15% PST, or C$21,129.60. The provincial tax bill on a Cyberbeast will be C$33,773.20. Of course they would have had to pay 7% PST regardless, so the net difference is an extra C$11,470.30 for the Dual Motor Cybertruck and C$22,153.90 for the Cyberbeast.
Here is the response from the Ministry of Finance in full.
We apologize for the delay in responding to your inquiry. We can confirm that the Tesla Cybertruck is a passenger vehicle. Therefore, unless an exemption applies, it is subject to the higher rates of provincial sales tax (PST) if sold for $75,000 or more as a zero-emission vehicle (ZEV).
Section 37 of the Provincial Sales Tax Act (PSTA) states that a purchaser who purchases tangible personal property (e.g., vehicles) at a sale in British Columbia must pay to the government tax at the applicable rate under section 34.
Subsection 34(1)(6.1) of the PSTA provides the rate of tax payable under section 37 on a passenger vehicle that is a ZEV. You can also find the rates listed on page 5 of Bulletin PST 116, Motor Vehicle Dealers and Leasing Companies.
The Tesla Cybertruck is a passenger vehicle and a ZEV. Therefore, unless an exemption applies, it is subject to the higher rates of PST if sold for $75,000 or more.
Editor’s note: We have updated the headline to make it clearer that this is a provincial luxury tax, and separate from the federal luxury tax. We apologize for any confusion.
