Switching over to PST frustrating for some businesses
Frustration — and, in one case, confusion — is being felt by some Tri-City business owners begrudgingly preparing to revert back to the Provincial Sales Tax (PST) system on April 1 when the Harmonized Sales Tax (HST) becomes history.
The Tri-City News approached a handful of small businesses in the region last weekend, and learned the general sentiment among owners is that making the switch will be complicated. However, the director of outreach for PST re-implementation says information, webinars and one-on-one consultation can help business owners sort through the confusion.
"At first, people were surprised PST was coming back. Fair enough, it's our job to get the word out. Then we've been trying to get the word out and really it's a simple task if you have to register and you go on line and if you have the information ready, it will take just ten to 15 minutes."
Still, some businesses will face an adjustment period.
Sean Clark, manager of Hourglass Comics in Port Moody, still doesn't know whether or not comics are classified as magazines and subject to both PST and the Goods and Services Tax (GST).
Previously, only the 5% GST was charged on comics, but when the HST was introduced, comics were subject to the PST, too.
"Going from a 5 % [GST] tax to a 12 % [HST] tax did hurt us a little bit," said Clark.
He will be calling the PST hotline set up by the B.C. government to assist businesses with the tax changeover. Still, there could be headaches in store for Clark.
"If there is no PST on comics, because we just got an inventory tracking system, it will be a bit of a pain, yes," said Clark. "We would have to go through each individual item and change the tax code."
Across town at Suter Brook Village, Maria Livingstone, co-owner of Dandelion Kids, is also dreading updating her sales machines — a lengthy process that she endured when the HST arrived.
"It probably ate up 20 hours of our time," figures Livingstone. "For us, it was the computer coding, separating out the taxes. Now we have to reverse it all back."
Meanwhile, in Port Coquitlam, staff at a four-month-old business will have to become acquainted with the old PST/GST remittance system. Nicole Floris is the manager of Hemp Hemp Hooray which specializes in hemp clothing, pipes and other smoking paraphernalia.
She said said there may be a reduction in exemptions under the new system for some inventory items and she will personally miss the HST sales tax credit, money she used to help pay her rent and car insurance. However, the B.C. sales tax credit will be re-introduced as part of the return to the provincial sales tax (PST) system.
Lih-Ming Tam, president of the the PoCo Business Improvement Association, said his organization "put out a nudge" to its members to get registered.
"The sense that I am getting is that the [PoCo] businesses are ready," said Tam. "The feedback that we [the BIA] got is that everything is well in hand."
However, he has concerns that the new tax regime will put a strain on businesses. "This move back to what I would call a regressive tax system is absolutely costing our members. It's costing our community."
Businesses will now be looking at an increased cost of 7% PST for day-to-day costs [not inventory they plan to sell], which will drive retail prices up to compensate for the change, figures Tam, who is the owner of TLA Accounting Services Inc. and has been counseling business clients in preparation for the sales tax transition.
"It's a whole new layer of regulation," he said. "Businesses will now have to collect, remit and track two taxes. It's a little bit onerous."
For consumers, the list of taxable items under the PST is available online: search for "What's Taxable under the PST."
The Tri-Cities Chamber of Commerce is hosting a special PST breakfast for members, featuring representatives from EPR and industry expert Ron Osborne. It takes place March 19 from 7:30 to 9:30 a.m. at the Best Western Plus Coquitlam Inn and Convention Centre. Pre-register at email@example.com.