PST in BC and Ontario
is being replaced by HST on July 1, 2010.
Information listed below is applicable only prior to July 1, 2010.
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For
PST information for Ontario, please follow
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1.
What is PST?
PST is a consumption tax that applies to retail sales and leases of taxable
goods or services in British Columbia, and to taxable goods brought into
the province for use.
This means that the person who purchases or uses the taxable good (new and used) or service in British Columbia pays the PST.
2. Do You Need To Register As A Vendor?
Many businesses operating in the Province of British Columbia must apply to the Consumer Taxation Branch (the branch) for registration as a vendor under the Social Service Tax Act (the Act) before commencing business. This bulletin provides information to assist you in determining whether or not you need to register.
3.
Who must register as a Vendor?
British Columbia Businesses
You are required to register as a vendor with the Consumer Taxation Branch
if you engage in any of the following business activities in British
Columbia.
- Regularly make taxable sales of goods or lease taxable goods as a lessor.
- Provide legal services in British Columbia.
- Sell taxable parking within the Vancouver Regional Transit Service Area.
- Provide taxable services. A taxable service is any service provided to install, assemble, dismantle, repair, adjust, restore, recondition, refinish or maintain tangible personal property.
- Sell a telecommunication service.
- Sell propane.
- Act as a liquidator, receiver, receiver-manager or trustee and dispose of assets in the course of your business.
Out-of-Province
Businesses
Businesses that are located outside British Columbia and regularly sell
goods to British Columbia purchasers are required to register if they meet
all four of the following criteria:
- solicit sales in British Columbia through advertising or other means,
- accept purchase orders originating in British Columbia,
- sell goods to British Columbia purchasers, and
- cause the goods to be delivered to a location in British Columbia.
In determining whether or not you must register, please note the following.
- Solicitation can occur by any means including mail, Internet, fax, or newspaper advertisement (not a complete list).
- Orders to purchase include telephone, written, or e-mail orders from a location in British Columbia, regardless of whether or not the business has an agent in the province.
- Delivery into British Columbia includes goods shipped either physically or electronically by a seller or an agent of the seller.
Out-of-province
sellers are required to hold a valid registration certificate at the
time the seller causes the goods to be delivered into the province.
4. Who is not Required to Register?
Persons who do not make regular taxable sales or leases do not need to
register as vendors. These include the following:
- Businesses selling only non-taxable goods, such as fresh fruit and vegetables, or services that are not taxable. If the business plans to add any taxable goods to its resale inventory, or provide any taxable services, it must first register as a vendor.
- Persons who are not in business but who occasionally dispose of personal goods through garage sales, flea markets or fund raising sales. In such cases, however, tax should be collected and remitted to the Consumer Taxation Branch on all sales.
- Wholesalers who do not make retail sales.
- Contractors exclusively involved in the construction or improvement of real property.
As of February 21, 2007, if you are an individual or group that makes retail sales and whose gross annual sales are $10,000 or less, you may be eligible to choose whether or not to become registered as a vendor. For example, some home-based crafts persons and non-profit organizations may be eligible.
5.
What is Taxable?
General goods (tangible personal property)
PST applies to retail sales or leases of tangible personal property (TPP) in British Columbia, unless there is a specific exemption.
TPP is personal property that you can see, weigh, measure, feel or touch, or that is in any other way perceptible to the senses. TPP includes natural or manufactured gas, software, heat, electricity and fixtures, but does not include prescribed fixtures.
Prescribed fixtures include machinery and equipment installed in a building or structure for heating, air conditioning, lighting, sewage disposal, and elevators or escalators to move people or freight.
Here are some examples of taxable goods:
- alcoholic beverages
- art and art supplies
- building materials
- clothing
- computers, software and software updates
- cosmetics and grooming aids
- flowers
- furniture and appliances
- motor vehicles and automotive parts
- natural gas, heat and electricity for business use
- pets
- souvenirs
- Taxable services
PST applies to specified labour services, referred to as taxable services. A taxable service is any service provided to install, assemble, dismantle, repair, adjust, restore, re-condition, refinish or maintain TPP.
Generally, if an item is taxable when purchased, services provided to that item are taxable.
Here are some examples of taxable services:
- automobile maintenance, repairs, painting and cut polishing
- camera repairs
- engine tune-ups
- furniture repair, re-upholstery and refinishing
- maintenance of plants planted in portable containers
- protective treatments applied to maintain taxable goods, such as fabric protection, rustproofing and painting
- repairs to business equipment, such as cash registers, photocopiers and fax machines
- setting up temporary display counters, shelves, booths and similar items at trade fairs and conventions
- television, stereo and computer repairs
- watch repair and maintenance
Parking rights and telecommunication services
PST also applies to the purchase price of parking rights in the Greater Vancouver Transportation Service Region and to telecommunication services.
6.
What is Not Taxable?
Exempt goods
You
can sell the following goods to everyone without collecting PST:
- candies and confections
- children’s clothing and footwear (see Bulletin SST 009, Children’s Clothing)
- drugs and medicines sold on the prescription of a physician, dentist or veterinarian
- food products for human consumption
- non-motorized two-wheeled bicycles
- vitamins and dietary supplements
- water and non-alcoholic beverages
You can also sell the following goods to everyone without collecting PST; however, these items must meet certain conditions for exemption or are limited to the items specifically stated in the Act.
- Books, newspapers, magazines
- Specified safety equipment
- Specified energy conservation materials
- Specified medications and health-related equipment and supplies
Exempt taxable services
The following labour services are exempt from PST:
- automobile towing, emergency roadside tire changing and emergency battery boosting (but not including battery recharging),
- cleaning services, such as laundry and dry cleaning, carpet and upholstery cleaning, janitorial services, engine shampoos, and car washes and waxes,
- labour to install TPP that becomes real property when installed,
- personal services, such as hairstyling, barbering and beauty treatments (but sales of product are taxable),
- services provided to animals, such as horseshoeing, pet grooming or veterinary services,
- services provided to fixtures, if performed on-site,
- services provided to software, such as installing, configuring, repairing,
- restoring or providing corrective action, including eradicating viruses,
- services to clothing and footwear,
- services to goods that are brought or sent into the province solely to receive taxable services and, immediately after receiving the services, are removed from the province (seller must have documentation verifying the circumstances of the sale),
- services to items that are exempt from tax (such as repairs to non-motorized two-wheeled bicycles), and
- services to the following goods if designed for household use: refrigerators, stoves, ovens (including microwave and convection ovens), clothes washers and dryers, dishwashers, freezers, vacuums, rug cleaners, sewing machines, rugs and carpets, draperies and curtains.
7. What benefits do I get for registering and collecting PST?
When you register as a vendor, you get a commission for collecting and remitting PST on behalf of the province. The commission is based on the amount of tax you collect during the reporting period, to a maximum of $99.
8.
Requirements for Unregistered Businesses
Collecting and remitting tax
If you are not required to register as a vendor, you are still responsible for collecting and remitting PST if you occasionally make taxable sales or leases.
In such cases, you should fill out and send in a Return of Tax Due on Taxable Tangible Personal Property by a Purchaser/Seller Not Registered form (FIN 428), along with the PST due.
As of February 21, 2007, some individuals and groups that occasionally make retail sales (i.e. gross annual sales of $10,000 or less) may be eligible to choose whether or not to register and collect PST on their sales. For example, some home-based crafts persons and non-profit organizations. For more information, please see the notice, New Registration and Collection Threshold.
You also pay PST on most goods that you use in your business, including goods you buy, rent or lease from outside the province. If your supplier does not collect the PST, you self-assess the PST when you bring the goods into the province and pay the PST due using the same form as mentioned above. This applies to goods, such as operating supplies, tools, equipment or other goods you did not purchase for resale.
9.
Paying PST
What goods and services do I pay PST on?
You pay PST
on equipment and supplies that you purchase or lease for use in your
business. In this case, you are the end user of the goods and are responsible
for paying the PST.
Examples of equipment and supplies that you purchase for your business
include:
- office equipment, such as desks, chairs and cash registers
- office supplies, such as receipt books, stationery and cash register tapes
- business equipment and supplies, such as vehicles, shop equipment and
- cleaning supplies
You pay PST on taxable services provided to machinery and equipment used in your business, including taxable services applied to goods you send out of the province to receive services.
You pay PST when you purchase parking rights in the Vancouver area and telecommunication services (e.g. telephone and internet) for use in your business.
You pay PST on your cost of items taken from your resale inventory or purchased for the following use:
- promotional items used or given away to help advertise or promote your business demonstration or display items if they are not immediately available for sale samples, gifts and prizes
- advertising flyers
- donations to charities or other organizations
You pay PST
on your cost of anything taken from your resale inventory for use in
your business or for personal use.
Generally, you pay PST on items that you purchase solely for lease or rental
purposes and later use yourself or allow an employee to use. You calculate
the PST due on the depreciated value of the item or 50% of the original
purchase price, whichever is greater. However, you may not be required
to pay PST on the depreciated value when you occasionally supply an operator
with the item. For information, please see Bulletin SST 082, Rentals and
Leases of Tangible Personal Property.
You pay PST on equipment you bring into the province temporarily if the
equipment is in the province for more than five days. Please see Bulletin
SST 098, Equipment Brought into the Province for Temporary Use (1/3 Formula).
You pay PST on taxable goods for use in your business that you purchase
from suppliers outside of the province. If the seller does not charge you
PST, you self-assess and pay the PST due on your total landed cost to bring
the goods into the province.
The total landed cost is:
- the purchase price (in Canadian funds),
- delivery, freight or shipping charges,
- exchange, customs, duties, federal excise taxes, and
- any other costs or expenses you pay to receive the goods in the province (do not include the GST).
You pay PST on the lease price of taxable goods for use in your business that you lease from lessors outside of the province. If the lessor is not registered to collect the PST, you self-assess the PST due on the lease price while the goods are in the province.
When you self-assess PST on goods for use in your business or for personal use, record the PST due at Step 3 of your next tax return form (FIN 400).
10.
Charging and Collecting PST
You must show PST separately on all invoices except on sales of alcohol,
which may be sold at tax-included prices. You calculate the PST to the
nearest cent, with one half cent rounded up to one cent.
11. What is the PST rate?
| Items | PST Rate |
| Goods and services | 7% |
| Alcohol | 10% |
| 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% |
12.
How do I get a Vendor Permit?
You have two options when registering for PST number:
Option # 1
You can always visit your local Consumer Taxation Branch or Government
Agents office and complete the registration form. Please make sure that you
fully understand the questions on the registration form and answer them correctly.
It is quite difficult to change certain information once it is recorded. (You
may have to wait for up to one year). Also, be prepared for delays due to the
workload.
Option # 2
We can easily assist you with registration. You can visit our office or
submit your information online or via fax or e-mail. If you are wondering
why should you let us help you with registration, the answer is simple.
- You do not have to take any time from your busy schedule to do the registration.
- If you are located in a small town, there is no need to travel, just order online.
- We have the expertise to complete the registration in the way that best suits your needs.
- We work for you, not the government.
- For a small fee of $35.00 we will do all the necessary work for you.
As always, it is up to you to decide to do the work the easy way or the hard way. In any case, we are always available to answer your questions. Feel free to contact us by e-mail or telephone, at the numbers listed below.
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