Provincial Sales Tax (PST)
While the harmonized sales tax or HST has expanded across multiple provinces, British Columbia is one of three provinces that continue to levy stand-alone provincial sales taxes or PST. The PST is a sales tax that businesses must charge on a variety of different goods and services in addition to the goods and services tax or GST. Business owners must understand their obligations for collecting and remitting the PST and how they should register for the BC PST.
Table of Content:
- What Is the PST BC?
- When Do I Need to Register for the PST?
- When Should I Begin Charging the PST?
- Which Goods Are Included for the PST?
- Is There a Services PST?
- How to Apply for a PST Account?
- How to File a PST Return?
- How to Calculate PST?
- What Is the Deadline for Filing the PST?
- How to Remit the PST?
- The benefits of partnering with our tax and accounting professionals.
What Is the PST BC?
The BC PST is a provincial retail sales tax that is charged at the time that taxable services, goods, or computer software are purchased for personal use. There are some exemptions to the PST BC. The general PST rate in British Columbia is 7%. However, some types of goods and services have different PST rates. The following is a list of PST rates that are charged on goods and services in BC:
- General PST rate – 7%
- Accommodations – 8%
- Alcohol – 10%
- Vehicles – Rates vary depending on price and type of seller
- Boats purchased in private sales – 12%
- Boats purchased from GST registrants – 7%
- Non-turbine aircraft or parts purchased from GST registrants – 7%
- Non-turbine aircraft or parts purchased in private sales – 12%
- Mobile homes – 7% or 50% of the fair market value, lease price, or purchase price
- Modular homes – 7% or 55% of the fair market value, sales price, or lease price
- Portable buildings – 7% or 45% of the fair market value, lease price, or purchase price
Businesses that have to register for the GST must collect both the PST and the GST when they provide taxable services and goods to which both types of taxes apply.
When Do I Need to Register for the PST?
Businesses that sell taxable goods, services, or computer software in British Columbia must register for the PST. Businesses that sell taxable goods in BC but are located outside of the province are also required to register for the PST. If your business intends to provide taxable services, software, or goods in the province, you should register for the PST before you start providing them.
When Should I Begin Charging the PST?
Businesses should begin charging and collecting the PST at the time of sale. This is when the PST is payable and means that you should be registered for the PST before you begin providing taxable goods, software, or services in the province to comply with the law.
Which Goods Are Included for the PST?
The types of goods to which the PST applies include the following:
- Purchases and leases of new or used goods in British Columbia
- Goods that are sent, delivered, or brought to British Columbia to be used in the province
- Software purchases
- Accommodations purchases
- Gifts of aircraft, boats, and vehicles
- Purchases and leases of vehicles in private sales and in sales from GST registrants
- Purchases and leases of boats
- Purchases and leases of aircraft
- Purchases of modular or mobile homes
- Purchases of portable buildings
- Purchases of retail goods
- Liquor purchases
- Cannabis and cannabis accessories
- Building materials
- Furniture and appliances
- Fixed machinery
Is There a Services PST?
The PST also applies to certain types of services in addition to goods and software. The PST applies to services to taxable goods, legal services, and telecommunication services. Some examples of services to taxable goods for which the PST must be charged and collected include the following:
- Furniture refinishing, upholstery, or repair
- Repair or maintenance services for taxable goods
- Automobile repairs and maintenance services
- Applications of protective coatings or paint to taxable goods
- Installation and setup of taxable goods
- Assembly services of taxable goods like furniture
The PST should be charged and collected at the time the taxable services are provided.
How to Apply for a PST Account
Registering to collect the PST is simple. You can register by mail, in person, by fax, or online. To register in person, you can go to a Service BC Centre and either use one of the available computers to register online or turn in your completed application for registration after completing and printing it. You can find the Service BC Centre location in your area here. If you plan to apply in person, you will need to bring in all of the supporting documents together with your application.
To register by mail or fax, print out and complete the application and then either mail it or fax it to the Ministry of Finance. The fax number is (250)356-2195. The mailing address is as follows:
Ministry of Finance
PO BOX 9435 STN PROV GOV
VICTORIA BC V8W 9V3
Finally, you can register online with the eTaxBC system. According to the website, the processing time can take up to 21 days.
How to File a PST Return
The PST return can be filed online through the eTaxBC system, at a local government office, or by mail or courier. If you want to file your return in person, you can bring your completed return and payment to a Service BC Centre. There is also a dropbox for returns and payments located at 1802 Douglas Street in Victoria. If you file your return and make your payment using the dropbox, you should only pay by cheque, money order, or bank draft that is payable to the Ministry of Finance. To file your return online, you must first open an online account. If you don’t open an online account, the Ministry of Finance will mail a paper return to your business when it is time to file your return and remit the PST. To send your return and payment by mail, use the following address:
Provincial Sales Tax
PO BOX 9443 STN PROV GOVT
VICTORIA BC V8W 9W7
If you file your return by courier, you will need to use the following address:
Provincial Sales Tax
Ministry of Finance
1802 Douglas Street
Victoria BC V8T 4K6
You should include your PST account number on your payment so that it is routed correctly.
How to Calculate PST
To calculate the PST, use the PST rate for the types of goods or services that your business provides. Multiply that rate by the purchase price to arrive at the PST. For example, if you have a clothing store, the 7% rate applies. Multiply 0.07 by the purchase price of the item and add that amount to the total at the time of purchase. You should then keep the PST amounts that you collect in a segregated account to make your tax filing and payment processes easier.
What Is the Deadline for Filing the PST?
The deadline for filing the PST return will depend on the annual amount of PST that is collected. Businesses that collect more than $12,000 in PST each year must file monthly PST returns. Those that collect from $6,000 to $12,000 in PST each year must file PST returns either monthly or quarterly. Businesses that collect from $3,000 to $6,000 in PST each year must file PST returns either quarterly or semi-annually. Finally, businesses that collect less than $3,000 per year must file their PST returns quarterly, semi-annually, or annually. Businesses that sell liquor are required to file monthly returns.
The province will assign businesses reporting periods at the time of registration. The PST registrants must then file their PST returns according to their assigned reporting periods. The reporting period for a business will start on the first day of the month in which it first registers.
If the amount of PST that a company collects varies, the province may change its reporting period. Companies can also request that their PST reporting periods are changed to match their accounting periods if their accounting periods do not match calendar months at the time that they register for the PST. The completed return must be filed no later than the last day of the month that follows the end of your reporting period.
How to Remit the PST
Businesses are required to report and pay all of the PST tax that they have charged. This includes taxes that they have charged but have not yet collected. Businesses must report and remit PST that they charged at an incorrect rate or on non-taxable goods.
The payment of the PST must be made when the PST return is filed. You can remit your PST in several ways, including online through the eTaxBC system, at a government office, by mail or courier, or through your bank. To pay the PST electronically, you will need to set up an account first. If you have not set up an online account, the government will send a paper return to you. If the annual sales of your business are $1.5 million or more, you must file your return and pay your PST electronically.
The benefits of partnering with Ensight Cloud CPA
Keeping track of reporting periods and PST return filing deadlines can be difficult for many businesses. Companies sometimes make mistakes when they determine the rates that they should use. The Ministry of Finance assesses steep penalties for certain types of errors or for failing to collect or remit the PST. Working with one of our tax professionals can help to ensure that your company charges the correct rate and files its returns and payments on time. We can also help you to avoid making potentially costly mistakes. Contact us today to schedule a consultation and to learn more about how we can help your company to fulfill its tax obligations.