An action plan has been established to ensure an effective and orderly transition to the PST.
FAQs
The Basics
Legislation
For Businesses
Transition Back From HST
Transitional Rules
PST Impacted Decisions
PST Re-Implementation and Other Taxes
Surtaxes, Levies, Special Rates Under the PST
Help with HST
Taxpayer Fairness and Service Code
The Basics
When will the PST be re-implemented?
The PST will be reinstated effective April 1, 2013.
Will the PST be re-implemented at 7%?
British Columbia’s provincial sales tax (PST) will be re-implemented effective April 1, 2013 at a general tax rate of seven per cent.
Will all permanent PST exemptions return?
The PST will apply to the same goods and services that were subject to PST prior to the implementation of the HST. All permanent PST exemptions will be re-implemented with the new PST, including:
- all food for human consumption (e.g. basic groceries and prepared food such as restaurant meals);
- most services (e.g. personal services such as haircuts, dry cleaning, funeral services);
- admissions and memberships;
- bicycles;
- newspapers and magazines; and
- all permanent PST exemptions for business.
How will the PST Apply?
The re-implemented PST, like the previous PST, will be a retail sales tax that is payable when a taxable good or service is acquired for personal use or business use, unless a specific exemption applies.
PST generally applies to:
- the purchase or lease of new or used goods;
- goods brought into BC for use in BC;
- the purchase of most services to goods (for example, vehicle maintenance, furniture assembly, computer repair);
- the purchase of telecommunication services including internet access, non-basic cable, non-residential telephone services, cell phone use, satellite services and facsimile services; and
- the purchase of legal services.
Read more about the Province’s plan to return to PST.
When will the legislation for the PST be available to the public?
The legislation for the PST was introduced on May 14, 2012.
Legislation
Does this legislation fully implement the PST?
The legislation introduced today meets government’s commitment to return to the seven per cent Provincial Sales Tax on April 1, 2013.Further work on regulations to fully establish the exemptions will continue over the coming months, after considering the input received from business to ensure clarity. Additional consequential and transitional amendments related to this and other legislation will also be made before April 1, 2013. The Province intends to publically release a final proposed version of the legislation this Fall to support business outreach and awareness, with the regulations to follow as soon as possible when complete.
Is the tax on gifts of Vehicles, Boats and Aircraft new?
The old PST imposed tax on gifts brought, sent or delivered into B.C. in certain circumstances. The new legislation includes more comprehensive provisions related to gifts of vehicles, boats and aircraft, including in province gifts, to ensure that these gifts are treated consistently whether the vehicle, boat or aircraft was acquired within B.C. or outside B.C. and to deal with the high level of suspected tax avoidance when it comes to transfers of vehicles, boats and aircraft.
Under the old PST, transfers of vehicles, boats and aircraft were subject to tax if any money or other consideration was provided for the vehicle, boat or aircraft. Unfortunately, to avoid paying tax, people often claimed that an item was provided as a gift rather than purchased. As the issue primarily relates to gifts between non-family members, the regulations will include an exemption from the tax on gifts where the gift is from a family member who has previously paid sales tax on the vehicle, boat or aircraft.
The Provincial Sales Tax Act treats gifts of vehicles, boats and aircraft consistently regardless of whether the vehicle, boat or aircraft was acquired within B.C. or outside B.C. and significantly reduces the potential for tax avoidance.
Is this the same legislation that was in place before? Why is new legislation required?
No, this is not the same legislation for several reasons:
- The old legislation and regulations were originally introduced over 60 years ago, in 1948 and were outdated not comprehensive which resulted in confusion and frustration for businesses and taxpayers.
There have been incredible changes in technology and business practices since the old legislation was introduced. Telecommunications and software, for example, look far different today than they did even 5 or 10 years ago. The new PST Act implements a tax that is substantially the same as the old PST, and provides all the same permanent exemptions – but in a new, modern, clear, comprehensive Act.
Why aren’t all the same exemptions and refunds in the legislation?
The legal authority for all exemptions and refunds are in the legislation.
The exemptions and refunds included in the PST Act are those which are generally more fundamental to the overall taxation system as a retail sales tax system. For example: exemptions for goods incorporated into goods for resale.
The specifics and details for most exemptions and some refunds will be located in the regulations; for example, as under the Social Service Tax Act, all specifics and details of the exemption for production machinery and equipment will be in regulations under the Provincial Sales Tax Act.
This approach is generally consistent with the approach taken in other consumption tax Acts.
If the legislation is in place, why can’t the HST be eliminated sooner than April 1, 2013?
Changing a province’s sales tax system isn’t a quick or easy thing to do. It’s a very complex undertaking for both business and government.
There are a series of steps that need to be taken. In addition to rewriting provincial tax laws and regulations, and developing and legislating the transitional rules, we need to rebuild our capacity to administer the PST.
Even when government implemented the HST, it took many months. And with harmonization, B.C. was really just eliminating one tax, the PST, and changing the rate of an existing tax that businesses were already familiar with. In most ways, the HST was just the GST at a higher rate.
Re-implementing the PST is different. It is not just changing the rate of an existing tax. It’s introducing a second, entirely separate tax for government to administer and businesses to comply with.
Businesses need time to prepare to comply with a second tax with its own set of rules and procedures that are separate from, and in addition to, those they have to follow for the GST.
They will need to readjust their accounting and administrative systems and prepare to collect a second sales tax. By the time the transition is complete, about 30,000 new businesses in B.C. will have started up under the HST and they will need to learn to administer the PST.
What goods and services are exempt from PST?
Similar to the Social Service Tax Act, the Provincial Sales Tax Act does not impose tax on things such as:
- Real property (residential housing or commercial real estate);
- Admissions and memberships;
- Professional services (other than legal services);
- Transportation fares (e.g., bus, train, ferry, airline)
In addition, all permanent exemptions from the PST will be re-implemented with the new PST, including:
- food for human consumption (e.g., basic groceries and prepared food such as restaurant meals);
- books, newspapers and magazines;
- children’s clothing;
- all permanent exemptions for business.
Unlike the Social Service Tax Act, the Provincial Sales Tax Act legislation only includes exemptions fundamental to the scheme of the act. The remainder of the exemptions will be provided by regulation. Note: in cases where the legislation does not impose tax, a specific exemption is not required to be provided. For example, as the PST is not imposed on purchases of real property (i.e., housing) or on admissions or memberships, no specific exemptions are required.
For Businesses
When will registration information be available?
In December 2012, letters will be sent out to businesses with information on how to register. If you do not receive a letter, or are unsure if you need to register, please contact us.
When will I be able to register my business for the PST?
Online registration for businesses will commence on January 2, 2013, with the PST implementation effective April 1, 2013.
Do I use my old PST registration number?
No, you will need to apply for a new PST registration number.
How will I register for collecting PST?
Online:
- E-services website for businesses with a business number
- www.OneStopBC.ca for new businesses
In person:
- Victoria customer service location
- Service BC locations
How will I remit the PST I collect?
You will be able to remit your taxes:
- Online through the E-services website (letters sent to businesses in December 2012 will have additional information on the E-service website)
- At your bank (in person or online)
- By mail
Will I be able to do any business (such as register for PST or change an address on my account) with the ministry on-line when the PST is re-implemented?
Electronic service (e-service) systems are currently being developed that will support registration, return filings, and payments, and account access and maintenance on-line. This website will be updated with more information on e-services as soon as it is available.
Transition Back From HST
Why does it take so much longer to go back than to implement the HST?
Changing a province’s tax system is a complex undertaking for both business and government. There are a series of steps that need to be taken, and as the HST Independent Panel report stated, going back to the PST will take 18-24 months.
Why was the HST easier to implement than bringing back the PST?
With harmonization, B.C. was really just eliminating one tax, the PST, and changing the rate of an existing tax that businesses were already familiar with. While there are some minor differences, like the point of sale rebates, basically the HST was just the GST at a higher rate (i.e., 12 percent HST instead of 5 percent GST).
What are the steps involved in re-implementing the PST?
Re-implementing the PST is not just changing the rate of an existing tax. The PST will be a second sales tax with its own set of rules and procedures that are separate from and in addition to those that businesses have to follow for the GST.
The Province needs to develop complex transitional rules in consultation with the federal government, rewrite provincial tax laws and regulations, and rebuild its capacity to administer the PST.
Businesses will need to readjust their accounting and administrative systems to prepare for collecting a second sales tax.
Will we need to pay back the $1.6 billion the Province received from the Government of Canada?
The Province has concluded an agreement with the Government of Canada for the repayment of the $1.6 billion in transition funding it received when B.C. moved to the HST.
Under the new agreement, the Province will have five years to repay in full the transition funding, and Canada has agreed to waive any interest charges over this period. The extended repayment schedule will save the Province debt interest costs that would otherwise have been incurred had the Province been required to repay the full amount right away.
Transitional Rules
When will the transitional rules be released?
When B.C. harmonized, there were detailed transition rules. Transition rules for the re-implementation of the PST are currently being developed. The Province continues to work on transitional rules both for the housing sector and more generally. This website will be updated with information about housing transition rules as soon as they are released.
Are there going to be any transitional rules around housing?
Housing Transitional Rules have been released and can be found here.
PST Impacted Decisions
When the HST was introduced, the basic personal amount income tax credit was increased—will that be reversed?
As part of HST implementation, the basic personal amount tax credit was increased. This enhancement will be reversed with the re-implementation of the PST on April 1, 2013.
Will people still receive the B.C. HST credit when the PST is re-implemented?
No. The $230 B.C. HST credit will be replaced with the $75 PST credit when the PST is re-implemented.
Will private vehicles sales be taxed at 7% or 12%? And will it be PST or a separate tax?
The tax on private sales of vehicles, boats and aircraft will continue at a rate of 12 per cent. These sales are not subject to GST. The 12 per cent provincial tax rate ensures similar tax treatment between private sales and sales by GST registered businesses. Sales of vehicles, boats and aircraft will be subject to either PST or the tax on private sales, not both.
What will happen to liquor taxes and mark-ups?
The PST rate of 10 per cent on liquor will be reinstated with the re-implementation of the PST. Liquor mark-ups will be reduced to their pre-HST levels to generally keep shelf prices constant.
Will tobacco taxes increase?
With the re-implementation of the PST, the provincial portion of the HST on tobacco products will be eliminated. To offset this reduction, tobacco tax rates will be adjusted to generally keep the overall tax on tobacco constant.
PST Re-Implementation and Other Taxes
Will the tax on Natural Gas and Propane be re-implemented with the PST?
The tax on propane will be re-implemented at the same time as the PST. The tax rate will be 2.7 cents per litre, the same rate as prior to the implementation of the HST.
Will the hotel room tax be re-implemented and at what rate?
The tax on short term accommodation (formerly the provincial Hotel Room Tax) will be re-implemented at the same time as the PST. The tax rate will be 8 per cent, the same rate as prior to harmonization, and tax will apply in the same way it did prior to the HST.
Will the Municipal and Regional District Hotel Room Tax continue?
Yes, it will continue.
Will the resort municipality tax sharing arrangements be re-implemented?
The British Columbia Resort Municipality Initiative provided eligible resort municipalities with a portion of the provincial hotel room tax. When the hotel room tax was eliminated with the introduction of the HST, funding for resort municipalities was continued. Provincial government funding for eligible resort municipalities will continue with the re-implementation of the PST.
Surtaxes, Levies, Special Rates Under the PST
Will the luxury vehicle surtax be re-implemented with the PST?
The surtax of one per cent to three per cent on passenger vehicles with a purchase price of $55,000 and over will be re-implemented.
Will the battery levy be re-implemented with the PST?
The battery levy will not be re-implemented, as an industry stewardship program for the proper recycling and disposal of lead acid batteries was implemented as of July 1, 2011
Will the ICE levy be re-implemented with the PST?
The Innovative Clean Energy (ICE) Fund levy of 0.4 per cent of the purchase price on residential and commercial energy purchases of natural gas, fuel oil and propane sold on a grid will be re-implemented in the same manner as before harmonization. However, the re-implemented ICE Fund levy will not apply to residential and commercial purchases of electricity.
Will the passenger vehicle rental tax be re-implemented with the PST?
The Passenger Vehicle Rental Tax of $1.50 per day which raises dedicated revenue for the BC Transportation Financing Authority will be re-implemented.
Will the Multijurisdictional Vehicle (MJV) tax be re-implemented with the PST?
The multijurisdictional vehicle tax for inter-jurisdictional commercial carriers licensed under the International Registration Plan will be re-implemented.
Will the TransLink Parking Sales Tax be re-implemented as part of the PST?
Effective July 1, 2010, legislation related to the imposition of the TransLink parking tax was transferred to the South Coast British Columbia Transportation Authority Act and administration of the tax was transferred to TransLink. TransLink will retain the administration and enforcement of this parking sales tax.
Help with HST
What if I still have questions about the Harmonized Sales Tax (HST)?
The HST is administered by the Canada Revenue Agency (CRA). For information about the application of the HST, including questions about exemptions, which goods and services are taxable, and new housing rebates, please visit the CRA website at http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html or contact the CRA at 1-800-959-5525.
Who can I contact about questions around the PST?
Toll free in Canada: 1 877 388-4440
E-mail:CTBTaxQuestions@gov.bc.ca
Taxpayer Fairness and Service Code
What is the Taxpayer Fairness and Service Code?
In 2005, the Province partnered with small business organizations to create the Taxpayer Fairness and Service Code—a code that detailed a set of core values to guide government in dealing with the public and business owners.
The code was designed to improve communications so that problems were identified and resolved quickly or avoided altogether, resulting in less of a burden on taxpayers and more efficient revenue collection by the ministry.
What changes are being made to the code?
The updated Taxpayer Fairness and Service Code will reaffirm the Finance Ministry's commitment to fairness and service values, and affirms taxpayers' rights to courtesy, respect, confidentiality, fair treatment, help, information, dispute resolution and timely appeals.
What does the Taxpayer Fairness and Service Code do for taxpayers?
The updated code unveiled today preserves a set of principles detailing customers' rights to courtesy, respect, and confidentiality in their dealings with the government, and commits to the following standards:
- Courtesy and respect - Customers have the right to professional and courteous treatment.
- Privacy and confidentiality - Customers have the right to expect us to protect the confidentiality of their information.
- Help - Customers have the right to obtain our help so that they can clearly understand their obligations and entitlements.
- Fair treatment - Customers have the right to expect us to apply the law fairly and impartially so that they can have confidence in the ministry when we carry out activities critical to the funding of public services.
- Information - Customers have the right to request and receive complete, accurate, and clear information in a timely matter so that they can be aware of their obligations and entitlements.
- Understanding - Customers have the right to expect us to clearly explain the business we conduct with them and the steps we will follow.
- Dispute resolution - Customers have the right to expect a review of their situation if they disagree with an action we've taken or a decision we've made. In some cases, the right to a review will be through the appeal process.
- A timely appeal - Customers have the right to a timely appeal process.