The province of British Columbia has issued three additional Provincial Sales Tax (PST) Notices regarding the transition back to PST in the province, which will be become effective April 1, 2013.
Notice 2012-022, “Accommodation” and Notice 2012-023, “Municipal and Regional District Tax” provide information on the application of PST to purchases of accommodation in the province, and how the municipal and regional tax (MRDT) in participating communities applies on or after April 1, 2013. The tax on short-term accommodation will be 8%, the same rate as the former provincial hotel room tax which was in place prior to HST, but has now been incorporated into the Provincial Sales Tax Act. The integration of this tax with the PST will eliminate the additional administrative burden of having separate registrations, returns and remittances.
In addition, the MRDT of up to 2% levied on behalf of municipalities, regional districts and certain eligible non-profit tourism associations will continue after April 1, 2013, and will also be incorporated into the PST. The due date for remittance of the MRDT will change to correspond to the due date for remitting PST, which will be the last day of the month following the reporting period. All persons who provide taxable accommodation in British Columbia will be required to register to collect PST.
Notice 2012-024, “Software” gives an overview of the application of PST to purchases of software; however, the information in the notice does not apply to the sale of software sold in a form of physical media, which is taxable as tangible personal property.
Taxable software is defined as a software program, or right to use a software program, that is delivered or accessed by any means. Software purchased for use on or with an electronic device ordinarily located in British Columbia will be generally be subject to PST, unless a specific exemption applies, such as the exemption for custom software. As was the case under the previous social service tax, certain services provided to software, including installation services, will not be subject to PST.
Further information about exemptions for software will be provided in future publications.