Are you ready for BC's switch back to PST? Transition Rules | FBC, Canada's Farm & Small Business Tax Specialist

Are you ready for BC's switch back to PST? Transition Rules

It’s probably not news to you, but the HST, which is a combination of a 5% federal component and a 7% provincial component, will be replaced by the Goods and Services Tax (GST) and a B.C. provincial sales tax (PST) on April 1, 2013, subject to some transitional rules.

All businesses will need to register to collect PST if they sell or lease taxable goods, or provide software or taxable services in the ordinary course of business in B.C.

You may also need to register if you’re located outside the province but make sales in British Columbia.

FBC can assist with PST registration and any questions on the change from HST back to PST. Registration assistance is included as part of a FBC membership.

The BC government has a number of documents available online for both consumers and businesses that can help you and your customers, including the “What’s taxable, what’s not” guide covering many common goods and services.  

You can find all consumer and business publications online at: www.gov.bc.ca/pst.

The transitional rules describe how and when the PST applies to transactions that straddle April 1, 2013. 

PST (In general)

The PST will generally apply to:

  • The purchase or lease of new and used goods in B.C.
  • Goods brought, sent or delivered into B.C. for use in B.C.
  • The purchase of:
    • Software
    • Services to goods such as vehicle maintenance, furniture assembly, computer repair
    • Accommodation
    • Legal services
    • Telecommunication services, including internet services and digital and electronic media content such as music and movies
  • Gifts of vehicles, boats and aircraft

All permanent PST exemptions that were in place prior to the introduction of HST will be re-implemented with the new PST.

PST Rates (Effective April 1, 2013)

Item

PST Rate

Goods and services

7%

Alcohol

10%

Accommodation

8%

Passenger vehicles:

Less than $55,000

7%

 

$55,000 to less than $56,000

8%

 

$56,000 to less than $57,000

9%

 

$57,000 or more

10%

Other motor vehicles and trailers

7%

Vehicles, boats and aircraft acquired from private individuals or non-GST registrants (purchased or received as a gift)

12%

Manufactured mobile homes (on 50% of the purchase or lease price or fair market value)

7%

Manufactured modular homes (on 55% of the purchase or lease price or fair market value)

7%

Portable buildings (on 45% of the purchase or lease price or fair market value)

7%

The following taxes will also be re-implemented with the PST:

  • Passenger vehicle rental tax of $1.50 per day to raise revenue for the BC Transportation Financing Authority
  • Multijurisdictional vehicle tax for interjurisdictional commercial carriers licensed under the International Registration Plan
  • 0.4% tax on the purchase price of energy products (other than electricity which will no longer be subject to the tax) to raise revenue for the provincial Innovative Clean Energy Fund.

The $5 battery levy on lead acid batteries will not be reinstated. An industry stewardship program was implemented in July 2011 for the recycling and responsible disposal of lead acid batteries.

Online Registration: eTaxBC

A new online system, called eTaxBC, allows the business to register, file and pay PST, and manage the PST account online.

Reporting and Paying Tax

You will need to file a tax return to report and pay PST.

The PST return will report PST the business collected on sales and applicable services as well as PST owed on purchases made to run the business.

Options

Businesses will have the following options for reporting and paying PST, starting April 1, 2013:

  • Online
  • In person
  • By mail or courier

Deadlines

Once the business starts reporting and paying PST, completed tax returns and payments must be either:

  • Postmarked on or before the due date (if mailed)m, or
  • Date stamped by 4:30pm (PST) on the due date by either:
    • Ministry of Finance
    • Service BC, or
    • Financial institution

If the due date falls on a weekend or a B.C. statutory holiday, the tax return and payment are due the first business day following the due date.

Filing Frequencies

The frequency in which your business files a return and pays PST will be determined by what kind of business you’re operating and how much PST you collect each year.  

Some businesses will file and pay monthly, but you may also file and pay quarterly, annually and semi-annually depending on how much tax you collect. 

Tax Collected Per Year 

Filing Frequency Options

More than $12,000

Monthly only

More than $6,000 up to $12,000

Monthly or quarterly

More than $3,000 up to $6,000

Quarterly or Semi-Annual

$3,000 or less

Quarterly, Semi-Annual or Annual

 

Commission

The commission that existed prior to July 1, 2010 will be re-instated as part of the return to PST. Businesses that collect and pay tax on time and in full can receive a commission of up to $198 per reporting period.

Transitioning from HST to GST (the Federal Program)

The transition to GST is automatic. On March 30, 2013 you’ll collect HST and on April 1 you’ll collect PST and GST on applicable goods and services. 

The HST filing now becomes the GST filing. There is no need to register for a GST number as your HST number will become your GST number.

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