Wineries May Pay for Budget Shortfall

Mar 3, 2010

British Columbia considers increasing wine mark-ups to recoup tax reductions. Hard on the heels of an outcry in Washington state, the hurdles to entering the neighboring British Columbia market -- issues the Washington Wine Commission hopes to resolve soon -- the province’s cash-strapped government has proposed pricing changes to the mark-up levied on wines sold in the province. At issue are millions of dollars the government stands to lose through sales taxes when it harmonizes its provincial sales tax with the 5% federal sales tax known as the GST, which applies to all goods and services sold in Canada. Sales taxes on liquor currently amount to 15%, but the new, harmonized sales tax (HST) that takes effect July 1 would reduce the tax rate to 12%.

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