a little whine on wine

Right then.  This post has nothing to do with the technology industry other than to (a) demonstrate the ludicrous nature of taxation in British Columbia; and/or (b) confirm that people in the technology industry are passionate about their beverages.

Those who have worked with me know that I like to enjoy the occasional glass of wine.  Having just recently gone home (northern California) and discovered even more wine gems I decided I would take the leap, pay the exorbitant provincial tax at the border, and bring some wine back to my current habitat.  To be fair, I am very aware of the “f**k-you charge” that occurs at the hands of the British Columbia taxation overlords.

For some reason though I can’t drop it.  It’s time for a little public whine about wine taxation in British Columbia for those people lucky enough to bring in quality wine products.  So here goes…

When you bring a bottle of wine into British Columbia (above your allowable limit of 1.5L) you can expect the following taxes:

1. an excise tax ($0.62 per litre) - which is a duty which would otherwise be payable if the wine had been made in Canada
2. GST (at 5%) - standard federal taxation on GST value
3. British Columbia provincial liquor mark-up (the lower of $17 per litre or 17% of the GST value grossed up by 85%) - totally useless tax
4. British Columbia provincial liquor sales tax (10%)

So why am I so pissed?  Let’s break it down using a US$25 bottle of wine (note this value includes the tax you paid in the state it was purchased which in itself is b.s. because you are paying tax on tax, but I digress):

First we need to convert to Canadian dollars.  On the day I travelled it was 1.1168 which makes our bottle $27.92.

The excise tax - this one I’m ok with.  The products weren’t made in Canada and the rate was reasonable.

excise tax = .750ml * $0.62/litre  = $0.47

The GST is calculated on the value of the wine plus the excise tax - think of this as the fair market value of the product had it been produced in Canada.

GST = $27.92 original cost + $0.47 excise tax = GST value * 5% = $1.42

Again, this is reasonable.

Now let’s get to the root of my beef: the BC provincial mark-up.  Please, to appreciate my rant, check out Appendix B on page 9 of this CBSA document that outlines all the provincial/territory liquor mark-ups in Canada.

Uhm, BC, are you freakin’ smoking crack?!?!?

First you are going to charge us 17% but not on the GST value ($28.39) nooooooo you need to mark-up the GST value 85% ($52.52) and take 17% of that!  W.T.F.!!  Don’t even get me started on the 150% mark-up applied on spirits (yup, left the bottle of Hangar One at the tasting room in Alameda).  Oh yes, I saw your kind gesture, BC taxation department, that there is a cap of $17 per litre but when the bottle only cost approx. $28 to start with you can imagine why I lack empathy.  And why 17%? why not our standard liquor BC PST rate of 10%?  Just for kicks and giggles?  OK. Breathe.

BC provincial liquor mark-up fee = lower of $17/litre (0.75 * $17 = $12.75) or the calculated markup ($28.39 * 1.85 * 17% = $8.93)

Oh but we aren’t done yet are we greedy BC taxation department.   No, that was just the “mark-up fee”.  Now we actually pay the provincial sales tax which is not actually on the GST value (e.g. market value) nooooo it is the GST value plus the mark-up fee (yup, more tax on tax - LUV this system)!

BC provincial sales tax = [ $28.39 (GST value) + $8.93 (mark-up) ] * 10% (finally, our standard BC liquor tax) = $3.73

So, in our example we will pay $14.55 in tax on a $28 bottle of wine (52%).  But of all that good tax collected 87% is going to the province of British Columbia.  Could this be considered usury?  And, happy BC taxation department, exactly which program is this “sin tax” going to?  Just have it out for people who like a good wine so much they want to bring a little home?  Arrrrrgggggg!

So, yes, the first person who runs on a political platform to remove the liquor mark-up fee is going to get my vote.

Thank you for putting up with my whining.  Time to open that Panther Creek, Freedom Hill, Pinot Noir that cost an additional $20.59/bottle in tax for the luxury of enjoying it at my home here in BC.  For the record, it is worth every extra cent thanks to the talents of Michael Stevenson.

Cheers!