Editor’s Note: While wineries across Canada are grappling with the new HST and what to do with the increase, one B.C. winery has decided to eat the increase. Here’s a press released issued today from Laughing Stock:
PENTICTON, May 25, 2010 – While the upcoming introduction of the HST (Harmonized Sales Tax) in BC will cause the costs of many items to increase, BC wineries have the opportunity to pass those savings directly on to the consumer, thus decreasing the cost of BC wine when purchased directly from the winery.
Laughing Stock Vineyards has chosen to do just that and as of July 1st, 2010, will be passing along the 3% tax savings from the transition to HST to wine buyers on their website and in their tasting room. Currently, wine is one of the only products sold with taxes included in the display price and most consumers are not even aware that the current tax rate for wine in BC is 15% which includes 5% GST and 10% PST liquor tax. Therefore the taxation of wine will actually decrease when the 12% HST is introduced.
The BC Liquor Distribution Branch recently revealed there will be no tax savings passed through to the consumer as the LDB changed their liquor mark-up on all domestic and imported wine and spirits to offset that potential savings. BC wineries, however, are not affected by that new LDB liquor mark-up when they sell directly from the winery and thus have flexibility to adjust pricing to reflect the lower tax rate.
“Coming from a business background, we look at the big picture and since we have the option to decrease our pricing without hurting our bottom line, we are going to pass that tax savings along to the wine consumer,†says David Enns, winemaker and winery owner. “We just feel that this is the right thing to do. We eat it, you drink it.â€
Visitors to Laughing Stock’s website and tasting room on the Naramata Bench can expect to see price adjustments effective July 1st, 2010.
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