The Return of PST

Small businesses all over B.C. are bidding farewell to the HST this March.

It doesn’t have to be a burden, says Vancouver-based CGA Heather Weber, leader of MNP’s Indirect Tax Group. If you’ve been slacking, here’s what to do now. Do you even care?

“Businesses first need to evaluate whether they need to charge PST,” Weber says. It generally applies to sales or leases of tangible personal property—goods you can touch and feel. PST will apply to the sales and leases of these goods when the invoice is issued after April 1, 2013. PST will also apply to software; services and goods; accommodation; legal services; gifts of boats, vehicles and airplanes; and telecommunication services. “If your business is involved in software, software support, telecommunications, leasing or real property, there are specific rules that should be reviewed in detail,” she advises. And taxable goods and services acquired outside of B.C. and brought into the province after April 1, 2013 will be subject to PST.

Get your paperwork in order

Registration for PST began on January 2 online at “In an effort to make this easier, the website allows you to use your federal business number to bring up your business information,” says Weber. “You will be able to file returns and make payments online. All businesses that are required to collect PST will have to register for a new number—your old PST number will no longer be valid.”

Are you exempt?

“Notices have been issued regarding specific areas such as software, legal services and tangible personal property,” Weber says, adding that those issued to date confirm that sectors that had specific exemptions, such as farming and fishing, will continue to have exemptions. “Once the regulations are released, we expect to see many more notices issued to help specific industries.”

Train your staff 

“Training will be key for staff so that they understand what is taxable and when,” she says. “Systems will need to be reviewed so that the appropriate taxes are charged when invoices are generated.” For example, if you are selling your computers to a customer in Alberta and they send their delivery truck to your Kamloops warehouse to pick up the goods, are you required to charge GST and PST, or just GST? “Because your customer is picking up the goods in B.C., they will be required to pay PST and GST,” says Weber, with the caveat that there are special rules depending on where your goods are supplied.

Act fast, save money

“Until the PST is reinstated, we still have the HST in B.C. This may provide you with some tax advantages,” says Weber. For example, if you needed to upgrade your company vehicles and you did so this month, you could recover the full 12 per cent tax paid (depending on the commercial use). “Once we are back to a PST and GST system, the luxury tax on vehicles over $55,000 will be reinstated. This tax, like the PST, is not recoverable so it becomes part of the cost,” she says.

And there are other last-minute savings for businesses looking to expand or upgrade their equipment or premises. “Contractors buying inventory before April 1 for use in real property after April 1, 2013 will be required to self-assess the PST on the materials,” she says.

Real estate reality

“The transition back to PST will have a big impact on the purchase and sale of real property,” says Weber. “But it depends on what type of property. There are many rebates available under HST when personal residential property is purchased.”