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PST return looms for B.C. business
VICTORIA – Undoing the harmonized sales tax and establishing a modernized version of the 60-year-old provincial sales tax is the biggest task facing Premier Christy Clark's government in the brief legislative sitting that precedes the May 14 provincial election.
Finance Minister Mike de Jong introduced the transition legislation Wednesday. It includes provisions for transactions that straddle the transition date such as new home purchases.
The bill to replace the HST runs nearly 200 pages, and it will add accounting costs for business as well as taking away business input tax credits that match those available under the federal Goods and Services Tax. The government has given itself a deadline of April 1 to make the switch for the 2013-14 fiscal year.
The administrative burden of the switch starts with businesses reprogramming cash registers and other systems to go back to collecting two separate sales taxes. One of the few modern touches to the new PST is the ability of more than 100,000 businesses to register online here, and view online instructions to help make the transition.
About 30,000 B.C. businesses have started up since 2010, and operators may have no experience with the old sales tax system.
Provincial sales taxes on restaurant meals, haircuts and other services will be removed as of April 1, but one companion tax is being kept in place. Private sales of vehicles, boats and aircraft are exempt from GST, but the province levied a 12 per cent provincial tax on the transactions to equalize treatment of used vehicle sales between dealerships and individuals.
The government vowed to reinstate the old PST at seven per cent after the HST was rejected in a province-wide initiative petition. The HST was imposed in 2010, extending the provincial sales tax to a range of services.