B.C. backs off bid to pursue Costco over tax dodgers

RICHMOND, B.C. -- The B.C. government backed down Friday from a legal battle to force the retail giant Costco to hand over customer information on shoppers who avoid provincial sales tax by buying goods in Alberta.

Revenue Minister Rick Thorpe said he thinks British Columbians would follow the rules and pay sales tax when they return home if they know they what the rules are. So he has decided to reverse course and allocate money within the department's existing budget to mount a public awareness campaign.

"I believe very, very strongly that British Columbians are very, very compliant when they know the rules of taxation in British Columbia," Thorpe told a news conference at the Vancouver International Airport.

He said he realized he had gone too far in his hunt for information on British Columbian shoppers frequenting Alberta Costcos.

"My view is the demand notice was wide reaching in its request and although acceptable by law, in my opinion it was outside the scope of government's intention to seek targeted information related to specific tax administration matters," said Thorpe.

The government estimates it has lost millions of dollars a year in unpaid taxes.

"We believe, year-to-date as of December, it is approximately $16 million," Thorpe said.

Wholesale giant Costco filed a petition in B.C. Supreme Court to try and stop the province from demanding its client information.

"We really appreciate the fact that the government changed its mind," said Louise Wendling, senior vice president of Costco Canada. "It's very good for our members and the general population. We really commend them for what they've done."

The government asked for the names of B.C. residents and the dollar value of purchases they made in Alberta stores.

By shopping in Alberta, the residents avoid paying the seven per cent sales tax in B.C.

"The ministry is guided by the principles of the Taxpayer Fairness and Service Code, and is committed to ensuring we have the highest levels of protection for personal information at all times," Thorpe said in announcing the decision.

"Accordingly, I am pleased to advise the demand notice has been cancelled. In addition, I will be seeking changes so the accountability for issuing demand notices will rest with the minister, as it does in other Canadian jurisdictions."

People living in the border communities are relaxing at the news. Some had worried they might have to pay taxes on items they bought years ago.

Alvin Stedel, a city councillor in Dawson Creek, which is located just a 90-minute drive from an Alberta Costco, said he's not surprised at the government's move.

"A lot of people were upset about what they were trying to do. A lot of people were afraid the government was going to go back seven years and make people pay taxes."

Stedel said it's easier for people in his area to drive to Alberta to shop as opposed to other, nearby B.C. cities like Kelowna.

Stedel said shopping trips to Alberta are draining the local economy, however. He wants the government to consider lowering the provincial sales tax in boundary communities so they can compete.

Thorpe reiterated Friday that the government has no plans to cut the sales tax along the boundary with Alberta.

Revenue Minister Rick Thorpe said he thinks British Columbians would follow the rules and pay sales tax when they return home if they know they what the rules are.

"I believe very, very strongly that British Columbians are very, very compliant when they know the rules of taxation in British Columbia,"

That was my favorite quote. What a doofus.

"I believe very, very strongly that British Columbians are very, very compliant when they know the rules of taxation in British Columbia,"

Ha.
Haha. Ha.
Hahahahahahahahahahahahahahaahahahahahahahahahahahahahaha.

Ha!

Revenue Minister Rick Thorpe said he thinks British Columbians would follow the rules and pay sales tax when they return home if they know they what the rules are.

"I believe very, very strongly that British Columbians are very, very compliant when they know the rules of taxation in British Columbia,

Reminds me of an old Joke.

How do you get a bunch of Canadians out of the pool?

A: Ok Listen up, everybody out of the pool.

(They're socialists, they do what they are told.)

"I believe very, very strongly that British Columbians are very, very compliant when they know the rules of taxation in British Columbia,"

This is known as "very, very naive"...

4 posted on 02/03/2006 8:18:37 PM PST by Onelifetogive (* Sarcasm tag ALWAYS required. For some FReepers, sarcasm can NEVER be obvious enough.)

I live in Georgia, but it is my understanding (my wife assisted an Alabama relative with a tax return years ago) that the state of Alabama actually expects its residents to declare items purchased out of state (for example while on vacation in Florida)in order to pay income tax on them. I had four words in reply: "The hell you say."

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