A B.C. Supreme Court justice has ruled against The Brick, one of the province's biggest furniture retailers, in a battle over its "buy now-pay later" scheme.
The Brick appealed a fine of $200,000 in relation to a marketing scheme that promises customers they can purchase items at the store and pay for them up to 18 months later.
The store requires customers to sign up for a Brick Card and in exchange for a fee, the Brick arranges financing.
But according to a B.C. Supreme Court ruling, the company which owns The Brick — Quinico Financial — wasn't paying tax on that fee.
In 2000, a Ministry of Finance audit found the Brick had collected $2.4 million in administration fees over the previous four years.
The company claimed the fee was separate from the furniture purchase price and exempt from tax, but the government argued that since customers couldn't take advantage of the "Buy Now, Pay Later" deal without paying the fee, it was clearly part of a customer's package price.
The B.C. Supreme Court justice agreed, the Brick lost its appeal, and must now make a deferred tax payment of more than $200,000.
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