Explanatory Memorandum
(Circulated by the authority of the Treasurer, the Hon. J.S. Dawkins, M.P.)C. Background
Goods are taxed at different rates
4. Most goods are subject to sales tax at the "general rate" (which is currently 20%), unless the goods are listed in any of the Schedules to the Sales Tax (Exemptions and Classifications) Act 1935 (the (E & C) Act). Goods included in any Schedule to the Act are treated as follows:
| First Schedule | - | listed goods are exempt from tax; |
| Second Schedule | - | taxed at a rate of 30%; |
| Third Schedule | - | taxed at a rate of 10%; |
| Fourth Schedule | - | taxed at a rate of 20%; |
| Fifth Schedule | - | taxed at a rate of 20%. |
Taxation of motor vehicles
5. Under the current law, motor vehicles are taxed at either the 20% or 30% rate. Vehicles taxed at the 20% rate are listed in the Fourth Schedule, which covers commercial motor vehicles, and the Fifth Schedule, which covers passenger motor vehicles with a wholesale sale value of $30,505 or less. Vehicles that are motor cars or station wagons (including four-wheel drive vehicles) that have a wholesale sale value above $30,505 are taxed at 30% (item 61 of the Second Schedule).
6. The threshold amount of $30,505 is the wholesale sale value equivalent of the motor vehicle depreciation limit determined under section 57AF of the Income Tax Assessment Act 1936 . This threshold amount is calculated by a formula set out in item 61 of the Second Schedule. The current motor vehicle depreciation limit is $45,462.
7. Motor vehicles that are specially fitted out for transporting disabled persons in wheelchairs are taxed at 20% regardless of their wholesale sale value. This is achieved by excluding such vehicles from item 61.