Ocean Mist

Posted by Tax Consultants

New PST legislation

PST

The government introduced legislation on May 14, 2012, to meet government’s commitment to return to the Provincial Sales Tax on April 1, 2013.

The original provincial sales tax act was introduced in the 1940s, and countless changes were introduced over the years as adjustments were needed. That approach created a complex and convoluted tax landscape for businesses trying to comply with the tax. The new act will bring changes together in one statute that “may be easier to follow”.

As per the government, the PST is being re-implemented with all permanent exemptions. Consumers will pay PST only on those goods and services that were subject to the tax before July 1, 2010. Consumers will again not pay PST on purchases like food, restaurant meals, bicycles, gym memberships, movie tickets, and others, nor for personal services like haircuts.

Additional consequential and transitional amendments will also be required before April 1, 2013. The Province intends to publically release a final proposed version of the legislation as early as this fall to support business outreach and awareness.

The return to PST will also see:

  • B.C. HST Credit eliminated.
  • B.C. Sales Tax Credit re-implemented.
  • Basic Personal Amount Tax Credit enhancement reversed.
  • Tobacco Tax Rates adjusted to keep price levels consistent.
  • Continuation at 12 per cent of the tax on private sales of vehicles, boats and aircraft.
  • The PST rate of 10 per cent on liquor will be reinstated with the re-implementation of the PST.
  • The tax on propane will be re-implemented. The tax rate will be 2.7 cents per litre, the same rate as prior to the implementation of the HST.
  • The Hotel Room Tax (eight per cent, as it was before July 2010) will now be incorporated into the PST—no more separate registration, remittance or returns, reducing paperwork