The Environment tax is applied to any new tires sold in PEI, including spare-use tires. The PEI auto dealer or tire retailer will add the tax to the tires when you purchase a new vehicle, a used vehicle outfitted with new tires, or new tires for a vehicle you currently own or lease. The tax is not applied to the tires of a leased vehicle unless you purchase new tires for use on the vehicle you lease.
When you purchase a new or used vehicle outside the province, you will be charged the Environment tax the first time you register that vehicle in PEI. The Environment tax is collected on new tires at the first point of retail, not on tires sold after purchase from a retailer, i.e. new tires purchased second-hand.
Auto dealers and tire retailers must register with Taxation and Property Records and collect Environment Tax at the point of sale. See Application for Registration to collect Environment Tax
How much tax do I pay on tires?
Current Environment tax rates for inflatable tires and solid (donut) tires (per tire):
- Rim size 17 inches or less: $4.00
- Rim size greater than 17 inches: $11.25
Any change in rate of Environment Tax would be announced in the budget speech and would initiate legislative amendments to be tabled in the Legislative Assembly.
Are any tire purchases exempt from Environment tax?
Providing the vendor records and maintains documentation related to the sale, Environment tax is not collected in the following situations:
- New tires purchased in PEI and shipped directly from the vendor to the purchaser at a location outside PEI - proper documentation relating to the out-of-province delivery is necessary. Non-residents who purchase and receive tires in PEI must pay the tax even though the tires will be leaving the province.
- New tires certified for use on a wheelchair or a three-wheeled device used to transport a person with a disability – certification of use and invoice with purchaser’s contact details and signature required
- New tires replaced under warranty at no charge to consumer, excluding the amount paid by the customer for any portion of the cost of the replacement tire or additional cost of a tire of higher value than the replacement tire
- Off- reserve: tires purchased by a First Nation resident of a PEI reserve community - Lennox Island, Rocky Point, Scotchfort or Morell Rear – possessing the following:
- Status Card issued by Indigenous Services Canada bearing name and photo of purchaser; and
- Photo ID proving purchaser resides in a PEI reserve community
- On-reserve: tires purchased by a First Nations consumer regardless of residence, providing:
- Tires are delivered to a PEI reserve community by the vendor or their agent; and
- The purchaser holds Status Card issued by Indigenous Services Canada bearing their name and photo
What if I paid the Environment Tax in error?
Any consumer (or vendor) who pays the Environment Tax in error may apply to the Province for a refund. Request for Refund of Environment Tax.