VANCOUVER — The British Columbia government is promising a review of its cross-border tax collection policies, yet it is not backing down from an attempt to force Costco to turn over data about the purchases of B.C. members at its Alberta stores.

The government wants the information to track down B.C. residents who have avoided paying the 7 per cent sales tax by travelling to Alberta to shop at Costco outlets.

Costco is fighting the demand and has filed court documents that claim it violates the B.C. and Alberta Personal Information Protection Acts.

Rick Thorpe, the B.C. Minister of Small Business and Revenue, called a news conference yesterday to announce that he has asked his deputy minister to "review this whole matter."

"These are complex issues. I want this to be done in a thoughtful manner," said Mr. Thorpe, who has ordered the review to be completed within a week.

He said the review would examine "our whole approach to cross-border tax administration, tax fairness and how we go about doing that."

The minister stressed that in the Costco dispute, "I haven't changed my mind. I have asked my senior staff to review the situation."

Mr. Thorpe refused to make any further comment, because "the matter is before the courts."

He also declined to say if the province has made similar demands of other retailers.

About $12-million was collected last year from B.C. residents who complied with the requirement to pay sales tax on goods purchased out of province, said Mr. Thorpe.

It is not known how much revenue is lost by people who don't comply, but Mr. Thorpe said the government has a duty to try to collect taxes that are "rightfully due to B.C. and British Columbians."

He ruled out any cut in the sales tax in eastern British Columbia to try to reduce cross-border shopping.

As well, Mr. Thorpe said the province is only concerned with B.C. residents who purchase "big ticket" items in Alberta.

The B.C. Social Service Tax Act, which permits the government to order the production of "any information" or "any records" for tax collection, also allows the province to share the data with other governments.

"We do not compromise the protection of this information," said Mr. Thorpe, who added he has "150-per-cent confidence" the data would not be used inappropriately.

B.C. is the only province to request customer information from Costco, and NDP revenue critic Maurine Karagianis said it appears to be a "petty and fruitless endeavour. The underground economy is a much greater threat than cross-border shopping."

The urgency of the review ordered by Mr. Thorpe is in sharp contrast to the province's dealings with Costco.

An official in the provincial revenue ministry initially sent a letter to Costco in October, 2003, asking for the names and addresses of B.C. members who made purchases in Alberta stores, dating back to 1998.

Costco responded that it would not provide the information because it believed the request did not comply with the terms of the B.C. Social Service Tax Act.

The company filed a petition in B.C. Supreme Court in May, 2004, to try to resolve the dispute.

The court action was stalled because of a lack of response by the province.

In November, 2005, the province admitted that its initial request for information was invalid because it was improperly filed. It then made a new request for information about Costco purchases in Alberta, going back to March, 2000.

Costco filed a second petition in court last week, asking it to "set aside" the province's request.

The court hearing, which is likely several months away, could determine the validity of the broad powers to request information for tax collection contained in the Social Service Tax Act.

"If the province can convince the court it is authorized by law" to request this information, then it would also comply with provincial privacy legislation, said Errol Nadeau, acting director of the B.C. Office of the Information and Privacy Commissioner.