George Black lives in Manitoba, a non-participating province that has an 8 percent provincial sales tax. During the current year, he purchases a new Lexus for $82,000. He receives a trade in allowance of $36,000 for his old vehicle. The GST/HST charged on his new vehicle would be equal to:

Question

Quizplus · Accepted Answer

First, we need to calculate the amount before taxes that George will pay for the new Lexus:
$82,000 - $36,000 (trade-in allowance) = $46,000
Next, we need to calculate the GST that George will pay on the $46,000:
$46,000 x 0.05 (GST rate) = $2,300
Note that because Manitoba is a non-participating province, there is no additional PST charged on the purchase. Therefore, the total tax charged on George's new vehicle would be $2,300.

George Black Lives in Manitoba, a Non-Participating Province That Has