May 15, 2012
B.C. Unrolls Blueprint for New PST
Yesterday the British Columbia government introduced legislation (the Provincial Sales Tax Act – PST Act) to implement the new PST effective April 1, 2013. In a related news release, the B.C. Ministry of Finance reiterated the government’s intent to:
· Re-implement all permanent PST exemptions
· Make PST administration easier for businesses
· Apply the new PST to the same taxable goods and services purchased by consumers that the previous PST applied to before July 1, 2010
· Make the legislation clearer and easier to administer.
Still to come are the Regulations to the PST Act, which will provide much of the detail, particularly on exemptions and administrative matters, as well as any transitional provisions and consequential amendments to other legislation.
This TaxNewsFlash-Canada summarizes some of the key points in the proposed PST Act and the news release.
· 7% for taxable goods and services
· 10% for liquor
· 12% for private sales of vehicles, boats or aircraft
· Rates varying from 8% to 10% for motor vehicles where the purchase/lease value is $55,000 or more.
The proposed PST Act provides that certain businesses will be deemed to be carrying on business in B.C., including those with a B.C. telephone number or address listed in a B.C. directory, or where the business name appears in any advertisement that provides an address or telephone number in B.C. for the business. Businesses with employees or representatives in B.C. or with a warehouse, office or other place of business will also be deemed to be carrying on business in B.C.
Businesses located in Canada but outside B.C. will be required to register when selling taxable goods or software into B.C., when certain conditions are met.
In the news release, the B.C. government indicated that businesses would be able to register using their federal business number.
Small sellers threshold
Due date for filing
Exemptions from proposed
· A taxable component sold with a non-taxable component for single price
· Food for human consumption other than prescribed food products and water and ice
· Fuel taxed or exempt under the Motor Fuel Tax Act
· In relation to industry and commerce: various exemptions including raw materials, prototypes, packaging materials and production machinery
· Purchases or leases of goods intended for lease
· Certain supplies of software
· Legal aid services
· Motion picture or audio production recordings in prescribed circumstances
· Goods sold for less than 15 cents.
Much of the detail relating to these exemptions will be provided in the PST Regulations. Many exemptions that existed in the old PST legislation are not referenced at all in the proposed PST Act but these exemptions are expected to be included in the PST Regulations. The government has indicated it expects the PST Regulations to be released this fall.
Timing of tax liability
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