On May 14, 2012, Finance Minister Kevin Falcon introduced Bill 54, The Provincial Sales Tax Act, to return British Columbia to Provincial Sales Tax (PST), which will be effective April 1, 2013. As previously announced, consumers will only pay PST on goods and services that were subject to PST prior to the implementation of the HST on July 1, 2010. All permanent PST exemptions will be re-implemented and consumers will not pay PST on food, restaurant meals, bicycles, memberships or personal services, such as haircuts.
In addition, improvements to the administration of the sales tax will be introduced, helping to simplify compliance and reduce costs. The changes will be realized together in one statute to reduce complexity, as recommended by the business community and the Expert Panel on Business Taxation, which was established in January, 2012.
New measures to improve the PST include:
- new online access for businesses, including registration, account maintenance and payments;
- tax remittances and returns will now be due on the last day of the month, consistent with the remittance of GST;
- the 8% Hotel Room Tax will be incorporated into the PST return;
- businesses may register using their federal business number;
- retailers will be able to refund tax to consumers under a broader range of circumstances; and
- a commission of up to $198 per reporting period will be paid to registered businesses.
Furthermore, the Taxpayer Fairness and Service Code, first introduced in 2005, has been updated. This code details customers’ rights to courtesy, respect and confidentiality, fair treatment, help, information, dispute resolution, and timely appeals in their dealings with the government.
The Minister also confirmed that, over the next several months, regulations will be drafted to support the provisions in the legislation. During this time, the government will continue to consider input from businesses. A final proposed version of the legislation is expected to be released in the fall of 2012. By October 2012, the government will begin conducting seminars to train businesses on the application of the new PST, with business registration using the new online system scheduled to commence in January, 2013.
Further analysis of the draft legislation will be provided to Ryan clients in a future Tax Alert.
For more information on this news release and an electronic version of the draft legislation, please see the links below:
BC News release – May 14
Draft legislation