What do I have to charge Provincial Sales Tax (PST) on?
PST is applied to taxable goods or services that are acquired for use in British Columbia. It is not to be confused with Goods and Services Tax (GST) which is a federal sales tax. The general rate of PST is 7%, although there are other rates for specific items.
For the purpose of PST, taxable goods are tangible personal property. This is property that can be seen, weighed, measured, felt or is perceptible to the senses. Examples include computers, furniture and appliances, motor vehicles, natural gas, heat and electricity for business use.
Taxable services are those services that are provided to taxable goods such as vehicle services and repairs, services to assemble, set up, or to install or dismantle taxable goods, maintenance of electronics and office equipment are also taxable services. PST is also levied on short term accommodation, software, legal services and telecommunication services.
There are various PST exemptions available, two of the most common being: reselling an item and incorporating an item into other tangible personal property for resale. In these cases you do not have to collect the PST when selling the item, providing the customer is a PST registrant and provides you with their PST registration number, or an exemption certificate if they are not registered. Another common exemption is available for those corporations who purchase production machinery and equipment.
Real property, which includes land and any items that are permanently attached to land, is not subject to PST. Improvements to real property, which is tangible personal property that becomes permanently attached to the land or buildings likewise is not subject to PST. However, if you are a real property contractor and install goods that become improvements to real property, such as windows, cabinetry and plumbing, then you are required to pay the PST on these goods. This is because as a real property contractor you are viewed as the end user of the goods, rather than selling the goods to your customer. As you have paid PST you do not charge your customer PST.
If you have questions concerning what you should be charging PST on, please contact us for help on this issue. for our help on this issue.Download a copy of this issue