After a very poorly implemented HST and outrage from many British Columbians, B.C. will be returning to the provincial sales tax (PST) system on April 1, 2013. Whether you voted in favour of it or think this is just some sick April Fool’s joke, it’s back. Here’s what you need to know.
In July 2009, after winning their third straight election, the BC Liberals announced that the harmonized sales tax (HST) would be replacing the GST and PST. The HST, a value added tax, combined the five per cent federal portion (GST) with the seven per cent provincial portion (PST) into one 12 per cent tax paid on almost all purchases of goods and services. After campaigning against the HST, former B.C. Premier Bill Vander Zalm delivered an anti-HST petition with over 700,000 signatures to Elections B.C. After much controversy, the BC Liberal government, led by former Premier Gordon Campbell, brought the HST into effect on July 1, 2010.
In November 2010, Campbell announced his resignation and was succeeded by Christy Clark. In March 2011, the HST referendum was set for June later that year and Premier Clark proposed to cut the tax to 10 per cent if British Columbians voted to keep the HST. On August 26, 2011, Elections B.C. announced a 52 per cent voter turnout for the referendum and, of that, 55 per cent in favour of scrapping the HST and reverting back to the old PST system.
The PST is a retail sales tax payable when a taxable good or service is bought for personal or business use, unless a specific exemption applies. It will generally apply to:
- The purchase of new/used goods in B.C.
- Goods brought, sent or delivered into B.C. for use in B.C.
- The purchase of:
- Services to goods (e.g. vehicle maintenance, electronic repairs, furniture assembly)
- Legal services
- Telecommunication services (e.g. internet, digital/electronic media content like music and movies)
- Gifts of vehicles, including boats and aircraft
PST rates (effective April 1, 2013)
- Goods and services — seven per cent
- Alcohol — 10 per cent
- Accommodation — eight per cent
- Passenger vehicles:
- Under $55,000 — seven per cent
- $55,000 to $55,999 — eight per cent
- $56,000 to $56,999 — nine per cent
- Over $57,000 — 10 per cent
- Other motor vehicles and trailers — seven per cent
The Government of B.C. has put a big list together of what’s taxable under the PST and what’s not. The list includes things like: around the house, clothing/footwear and accessories, food and beverages, home services, accommodation and travel, health and beauty and many others.
If you own a business, you’ll need to register to collect PST if you sell or lease taxable goods, or provide software or taxable services in the ordinary course of business in B.C. If your business is located outside of the province but make sales in B.C., you’ll also need to register.
For more information on the return of the PST, visit www.pstinbc.ca.
Connect with Farhan on Twitter at @farhanmohamed.