It will soon cost more to use streaming audio and video media services in British Columbia, as the provincial government has decided to require these services to have their subscribers pay the provincial sales tax (PST).
The 7% PST will come into effect on July 1, 2020 for a wide range of popular online media services, including video platforms such as Netflix, Amazon Prime, Disney+, Apple TV, CraveTV, and YouTube Premium, as well as music platforms like Spotify and Google Music.
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The PST now applies to a wide range of online services; companies that see annual revenues of over $10,000 within BC will be required to register as tax collectors for their services.
This new policy was hidden in the provincial budget released today, within an item on expanded registration requirements.
“Effective July 1, 2020, new registration requirements apply,” reads the budget. “Canadian sellers of goods, along with Canadian and foreign sellers of software and telecommunications, will be required to register as tax collectors if specified BC revenues exceed $10,000.”
“These requirements will result in provincial sales tax being collected by a greater number of businesses in the digital economy.”
The new tax on online media will raise $11 million in the 2020/21 fiscal year, and $16 million in 2021/22 during the first complete fiscal year of implementation.
“BC has had a sales tax in place since 1948 – that has not changed. However, as people have shifted to buying more and more goods and services online, legislation in many jurisdictions hasn’t kept pace,” said the BC Ministry of Finance in a follow-up email to Daily Hive.
“Clarifying registration requirements will future-proof our tax system as the shift to digital purchasing continues.”
The Ministry of Finance states other provinces such as Quebec and Saskatchewan have also introduced sales taxes for such services, as well as some American states including Iowa, Florida, North Carolina, Pennsylvania, and Washington. However, the threshold for taxation varies between each jurisdiction.
“As individuals with CraveTV, Apple or Amazon Prime will know, companies that have a brick and mortar presence in Canada are already collecting the sales tax,” continues the email.
“This updated requirement also brings fairness for BC companies who are already subject to the sales tax.”