B.C.’s Finance Minister, Selina Robinson, released a budget with generally more significant expenditure measures than revenue measures. The following Provincial Sales Tax measures will impact retailers.
PST Obligations for Marketplace Facilitators Introduced
Effective July 1, 2022, marketplace facilitators (“businesses that facilitate sales or leases of certain goods, services or software for third parties through their online platform, including accepting payment from a consumer”), will be required to collect and remit tax on those sales and leases made in B.C. This obligation will apply to sales of taxable goods shipped from within Canada, taxable services (including short-term rentals and other taxable accommodation, but not including legal services), software, and leases of goods made through a marketplace facilitator. Sellers will be relieved of their obligation to collect and remit tax on sales and leases made through a marketplace facilitator.
Also as of July 1, 2022, marketplace facilitators will be required to charge provincial sales tax on marketplace facilitation services they provide to sellers.
The government will work over the coming months to expand the collection obligations to the sales of goods shipped from outside Canada to consumers in B.C.
The changes introduced in Budget 2022 do not introduce new taxes on taxable goods, software or taxable services obtained by consumers through online platforms. The provincial sales tax already applied to these transactions. However, in some circumstances, the obligation to pay that tax to the government fell solely on the consumer and there were no matching obligations for sellers or marketplace facilitators to collect and remit that tax to the government. To the extent that consumers were unaware of, or did not fulfil, their obligation to pay provincial sales tax directly to the government, the new tax collection requirements will increase the effective cost of some transactions.
Further detail is not available at this time (this information comes from page 92 of the Budget and Fiscal Plan).
Effective April 1, 2022, heat pumps are exempt from provincial sales tax. If a heat pump is purchased before April 1, 2022 to fulfil a contract where the heat pump is affixed or installed into real property on or after April 1, 2022, the person who paid the provincial sales tax on the heat pump will be eligible to apply for a refund of that tax.
To further incentivize the switch to heat pumps, effective April 1, 2022, the provincial sales tax on a fossil fuel combustion system that heats or cools buildings or water is increased from 7 per cent to 12 per cent. Transitionally, fossil fuel combustion systems will generally be subject to an effective tax rate of 7 per cent where, in relation to contracts entered into before February 23, 2022, a fossil fuel combustion system is affixed or installed into real property on or after April 1, 2022. For contracts entered into on or after February 23, 2022, fossil fuel combustion systems will be subject to the 12 per cent rate if they are affixed or installed into real property on or after April 1, 2022. Detailed transition rules will be published by the Ministry of Finance.
Gift Cards and Certificates for Software and Technology Services
Effective February 23, 2022, changes are made to the PST to clarify that gift cards and gift certificates for software and technology services are not subject to provincial sales tax when acquired. Effective February 23, 2022, the following bulletins are amended to clarify gift cards and gift certificates are not subject to PST when acquired:
- Bulletin PST 105, Software (PDF, 425KB)
- Bulletin PST 107, Telecommunication Services (PDF, 441KB)
- Bulletin PST 132, Building and Home Improvement Stores (PDF, 386KB)
- Bulletin PST 206, Grocery and Drug Stores (PDF, 431KB)
- Bulletin PST 311, Promotional Materials and Special Offers (PDF, 357KB)