VICTORIA - Finance Minister Kevin Falcon has introduced legislation to meet government's commitment to return to the Provincial Sales Tax on April 1, 2013.
As committed, the PST is being re-implemented with all permanent exemptions. The government also introduced common-sense improvements that will make administration of the sales tax easier for businesses.
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.
For businesses, the new legislation is clearer and easier to administer. 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 will be easier to follow, helping simplify business compliance and reduce costs. Improvements reflect recommendations from the business community and the Expert Panel on Business Taxation established in January.
New measures to improve the PST include:
- New online access for businesses, including the ability to register, update their account, and make payments.
- The due date for tax remittance and returns will be moved to the last day of the month to match GST remittance, simplifying administration for business.
- 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.
- Businesses can register with their federal business number, making registration easier.
- Retailers will be allowed to refund tax to customers in a broader range of circumstances.
- Businesses that collect and remit tax will again receive commission of up to $198 per reporting period (typically monthly).
The Province also updated the Taxpayer Fairness and Service Code, first introduced in 2005.
The updated Taxpayer Fairness and Service Code reaffirms the government's commitment to fairness and service values, and affirms taxpayers' right to courtesy, respect, confidentiality, fair treatment, help, information, dispute resolution and timely appeals.
Over the coming months, further work on regulations to fully establish the exemptions will continue and will consider the input received from business to ensure clarity. 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.
By October 2012, government will begin outreach seminars to train businesses on how the PST applies, and business registration using the new online system will begin in January 2013.
As previously announced, 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. Liquor mark-ups will be reduced to generally keep shelf prices constant.
- 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.
Minister of Finance and Deputy Premier Kevin Falcon -
"As promised, on April 1, 2013, consumers will only pay PST on those goods and services that were subject to PST before the implementation of the HST. All permanent PST exemptions will be re-implemented, and consumers will not pay PST on food, bicycles, memberships, or personal services like haircuts and more."
"The Taxpayer Fairness and Service Code demonstrates that this government is committed to taxpayer rights, fair dispute resolution and timely appeals. With the reintroduction of the PST, we are refreshing the code and affirming our continuing commitment to fairness and service to taxpayers."
Two backgrounders follow:
- Progress report on implementation
- Taxpayer fairness and service code
For more information about these measures:
For B.C. tax questions, call 1 877 388-4440
Ministry of Finance
Return to PST progress update
The return to a PST and GST system in British Columbia is a very complex process and requires careful planning, co-ordination and implementation through its various stages to ensure an orderly transition.
PST re-implementation timeline
The Province's action plan to return to the PST announced Aug. 26, 2011, is on track to return to the PST with all permanent exemptions on April 1, 2013.
The Province has introduced legislation to meet its commitment to return to the PST. The legislation has clarified language to reduce ambiguity and bring the old legislation up to date with current practices and technology. A number of the changes reflect recommendations from the Expert Panel on Business Taxation: http://www.fin.gov.bc.ca/experts_panel_tax.htm
Over the coming months, the Ministry of Finance will work on drafting regulations to support the provisions in the legislation. Additional consequential and transitional amendments will also be made 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.
Provincial Systems Development and Administration
The Province is finalizing its arrangements with the Canada Revenue Agency on staffing. Progress continues on establishing facilities and upgrading software to allow for enhanced functionality. Updated legislation, new software, e-service, and streamlined administration mean that fewer staff are expected to be required to administer the PST, saving B.C. taxpayers money.
Provincial Business Registration and Outreach
Business outreach seminars, beginning in October, will explain how the PST applies. Registration of approximately 100,000 businesses using a new online system will begin in January 2013. Businesses will benefit from new e-services such as online registration, remittance, and self service options.
As businesses receive information from the Province on the new PST, they will need to adapt their systems. Provincial programs to help business understand their responsibilities in administering the PST are under development.
Information on the return to PST and quarterly progress updates are available at: www.pstinbc.ca
- Aug. 26, 2011 - Referendum result - Province announces return to PST action plan.
- Sept. 8, 2011 - Q1 report - fiscal plan scenario and impacts announced.
- Nov. 28, 2011 - Q2 report - return to PST progress update.
- Jan. 11, 2012 - Terms agreed for repayment of B.C. HST transition funding.
- Feb. 17, 2012 - New housing transition rules and relief measures announced.
- Feb. 21, 2012 - Budget 2012 - First time new homebuyers' bonus announced; PST progress update.
- May 14, 2012 - PST legislation introduced.
- Fall 2012 - Final proposed version of PST legislation with amendments publically released.
- October 2012 - Business outreach seminars begin.
- Jan. 2, 2013 - Businesses can begin PST registration.
- April 1, 2013 - Provincial Sales Tax (PST) in effect.
Ministry of Finance
Taxpayer Fairness and Service Code: A B.C. Innovation
In 2005, the Province of B.C. partnered with small business organizations to create the Taxpayer Fairness and Service Code-a code that detailed a set of core values to guide government in dealing with the public and business owners.
The code was designed to improve communications so that problems were identified and resolved quickly or avoided altogether, resulting in less of a burden on taxpayers and more efficient revenue collection by the ministry.
The Taxpayer Fairness and Service Code was developed in partnership with the Chartered Accounts of B.C., the Canadian Federation of Independent Business, the B.C. Chamber of Commerce, the Retail Merchants' Association of B.C., the Retail Council of Canada, and the Sales Tax Practitioners' Liaison Committee.
The updated code unveiled today preserves a set of principles detailing customers' rights to courtesy, respect, and confidentiality in their dealings with the government, and commits to the following standards:
- Courtesy and respect - Customers have the right to professional and courteous treatment.
- Privacy and confidentiality - Customers have the right to expect us to protect the confidentiality of their information without compromise.
- Help - Customers have the right to obtain our help so that they can clearly understand their obligations and entitlements.
- Fair treatment - Customers have the right to expect us to apply the law fairly and impartially so that they can have confidence in the ministry when we carry out activities critical to the funding of public services.
- Information - Customers have the right to request and receive complete, accurate, and clear information (in writing) in a timely matter so that they can be aware of their obligations and entitlements.
- Understanding - Customers have the right to expect us to clearly explain the business we conduct with them and the steps we will follow.
- Dispute resolution - Customers have the right to expect a review of their situation if they disagree with an action we've taken or a decision we've made. In some cases, the right to a review will be through the appeal process.
- A timely appeal - Customers have the right to a timely appeal process.
Ministry of Finance