British Columbia has recently released Provincial Sales Tax (PST) Bulletin PST 001, “Registering to Collect Provincial Sales Tax (PST)”. This bulletin provides information to businesses regarding how and when to register for the tax, which becomes effective in the province on April 1, 2013.
Registration will begin on January 2, 2013 at 8:00 am. If your business was formerly registered to collect the hotel room tax or the social service tax prior to July 1, 2010, application for a new PST registration number is still required. Letters will be sent to businesses in December with information on how to register. If your organization does not receive a letter or is not sure if registration is required, you should contact the Ministry of Finance. An application for registration can be made online, in person, by fax or by mail using the Application for Registration for Provincial Sales Tax form (FIN 418), which will be available from the Ministry of Finance (“the ministry”), any Service BC Centre and on the ministry’s website beginning January 2, 2013.
Once the ministry approves the registration, a letter will be sent with the new PST registration number and tax return filing schedule.
Generally, if your business is located in British Columbia, registration is required if your business regularly sells or leases taxable goods, sells taxable services, or sells software. Certain persons are also required to register, such as: liquidators, receivers, receiver-managers or trustees (under certain circumstances); real property contractors (where PST is paid on taxable material and equipment by the customer under the contract); and direct sellers.
If your business is not located in British Columbia, but within Canada, registration is required if your organization performs all of the following:
- sells taxable goods or software to customers in British Columbia;
- accepts purchase orders (including by telephone, mail, e-mail or Internet) from customers located in British Columbia;
- delivers taxable goods or software to a location in British Columbia (delivery into British Columbia includes goods and software that you ship physically or electronically, even if you deliver the goods through a third party, such as a courier);
- solicits sales in British Columbia (through advertising or other means, including mail, e-mail, fax, newspaper or the Internet) for orders to purchase taxable goods or software.
Note that if your business simply has a website that is accessible anywhere in the world and does not target the British Columbia market, it is not considered to be soliciting sales in the province. However, if this website is available in addition to soliciting sales in British Columbia, such as, targeted internet advertisements, promotional flyers or newspaper advertisements, it is considered in-province solicitation and registration may be required.
Businesses defined as small suppliers are not required to register. Generally, these businesses cannot have any commercial premises in the province (e.g., goods/services sold from a home), and gross revenues from the sale of taxable goods, services and software are $10,000 or less for the previous 12 months and estimated to be $10,000 or less in the following 12 months. Also, lessors, independent sales contractors, certain providers of short-term accommodations, and real property contractors cannot be considered small suppliers.
Although not yet defined by the province, the bulletin provided some examples of related services (i.e., services related to taxable goods), which would be subject to PST. The examples indicate that the province has not broadened the scope of services subject to the new PST versus those taxed under the former social service tax (formerly, defined as taxable services). Related services include the following:
- repair or maintain taxable goods, such as automobiles, knives, watches, TVs, stereos, office equipment or computers;
- apply protective treatments to taxable goods, such as fabric protection, rust proofing or paint;
- set up, install or dismantle taxable goods, such as temporary display counters, shelves or booths at trade fairs and conventions; or
- restore taxable goods, such as furniture.
BC Bulletin PST 001