Earlier this year, I wrote a blog article on the end of the Harmonized Sales Tax (“HST”) in British Columbia, which addressed issues arising from the return to the Provincial Sales Tax (the “PST”). You can find that article here. That article examines the proposed scope of “taxable services”, and certain issues involving the collection and remittance of the PST under the new Provincial Sales Tax Act (the “PSTA”).
In preparing the earlier article, I indicated that there would be additional periodic articles, to update our readers on further PST related developments. At this time, I take this opportunity to advise you of the following further PST related developments:
- The BC provincial government issued notice 2012-017 entitled “Notice to the Restaurant Industry”, which advised that restaurants and eating establishments that sell liquor or other taxable goods must register for the PST. Goods that are sold in a restaurant or eating establishments that will be subject to the new PST include, spirits, beer, liquor, cider, coolers, mixed drinks and any beverage with an alcohol content exceeding 1%. Sale of goods that will be exempt from PST include, meals and other prepared foods, snack foods and non-alcoholic hot or cold beverages;
- The BC provincial government has further clarified the issue of “related services” (a defined term under the PSTA), in notice 2012-016. Related services are defined as those provided to tangible personal property, such as repair, adjustment, restoration, reconditioning, refinishing and maintenance services and services to install or dismantle goods. If the tangible property is subject PST, related services performed on that property is subject to PST;
- The BC provincial government has further clarify the application of the PST to legal services, which are generally “taxable services” under the PSTA. It is important to note that if legal services are provided outside of British Columbia, the PST is payable only on the purchase price of legal services that relate to British Columbia.
For those looking for further information on the transition back to the PST in British Columbia, I would suggest checking our blog on a periodic basis, for further updates. In addition, the provincial government website, www.pstinbc.ca provides useful information, as well as the ability to book a consultation for your business, to obtain further information, direction and guidance on the transition to or registration for the new PST.