Almost two years to the day after the HST was put in place in British Columbia, Finance Minister Kevin Falcon made the announcement early last week that legislation has been introduced that will meet the government’s commitment to return to the provincial sales tax (PST) effective April 1, 2013.
“As promised, on April 1, 2013, consumers will only pay PST on goods and services that were subject to PST before the implementation of the HST,” said Falcon last Monday in Victoria.
“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 HST was originally introduced in British Columbia on July 1, 2010, despite polls showing an 82 per cent disapproval rate.
However, after a massive public backlash, the tax was put to a public referendum in June 2011 and 52 per cent of the roughly 1.6 million voters chose to return to the PST system.
But while the PST system is being brought back, that’s not to say it isn’t coming without a few improvements.
The provincial government has said this new act will encompass all the changes made to the sales tax over previous years into one statue that should be easier to follow. Improvements reflect recommendations made by the business community as well as the Expert Panel on Business Taxation, which was established in January.
Improvements to 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 businesses.
  • The Hotel Room Tax (eight per cent, as it was before July 1, 2010) will now be incorporated into the PST – no more separate registration, remittance or returns, thus 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).

And, 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 of 12 per cent tax on private sales of vehicles, boats and aircraft.
  • The PST rate of 10 per cent on liquor will be reinstated, but liquor mark-ups will be reduced to keep shelf prices consistent.
  • The tax on propane will be re-implemented, returning to the old rate of 2.7 cents per litre.

By October 2012, the government has said it will begin holding outreach seminars to train businesses on how the PST applies and how to do business registration using the new online system, which will begin in January 2013.
In addition to the improvements being made to the PST, the province has also updated the Taxpayers Fairness and Service Code, which is described as the government’s commitment to fairness and service values.
It also affirms the taxpayers’ right to courtesy, respect, confidentiality, fair treatment, help, information, dispute resolution and timely appeals.
“The Taxpayers Fairness and Service Code demonstrates that this government is committed to taxpayer rights, fair dispute resolution and timely appeals,” said Falcon. “With the reintroduction of the PST, we are refreshing the code and affirming our continuing commitment to fairness and service to taxpayers.”
The government plans on releasing a final proposed version of the legislation as early as this fall.