Banka: PST refunds and exemptions
Now that PST is back in full force in B.C., there are some business cases whereby you can apply for a refund of PST paid on business expenses.
You can also apply for a refund of PST paid prior to July 1, 2010. You have four years to apply for a refund of your PST paid.
There are specific application forms for the following types of business cases; a motor vehicle or a multi-jurisdictional vehicle, PAC-funded purchases, production machinery and equipment, qualifying farmers, aquaculturists and fishers. If your refund type does not fall into one of these categories, there is also a general refund application.
An example of when you might use the general application is when you buy items in B.C. and pay the PST on them but the items are being used out of the province.
If they are being resold out of the province, you can apply for a PST exemption, but if you are using them out of province in your own business, then you are able to apply for a refund of the PST.
The refund application is a very detailed application and several documents are required in order to process the application.
For example, if you are a farmer who owns farm land, you will need to provide a copy of your property assessment notice as well as your B.C. Farmer Identity Card.
You will also need to detail your purchases on a worksheet and provide copies of all your invoices that show a description of the items purchased, name of the seller and the purchase price and provide a total of the PST that you wish to have refunded. You can use an excel worksheet for this purpose, or you can use the worksheet available from the government of BC website.
There are also variations of farmer, such as a beekeeper, or mushroom, egg, hog, poultry, rabbit or fur farmers, first nations farmers, and out of province farmers. The people who participate in these farming variations will also be required to prove the amount of gross income earned from your specific farming activity and will not be able to apply for a refund unless this income exceeds a certain threshold tied to the type of farming business.
Currently when the government of B.C. receives the application, you can expect to receive an email or letter requesting more information in approximately four to six weeks.
Currently there doesn’t appear to be any relationship between the amount of PST refund and the amount of extra detail asked for. It appears that the same scrutiny is used on a file whether the refund is $100 or $1,000 which I guess is our tax dollars at work.
However, the listing and the copying of the invoices could be a time consuming task and it is up to the business owner to decide whether they are able to complete the application themselves or to pay someone to complete it for them.
Exemptions are available for goods purchased for resale or lease including software or telecommunications services as well as for goods that are going to be incorporated into an item that well be sold. In order for a business to provide an exemption to another business, the PST number of the purchaser must be acquired. You can verify PST numbers on-line at https://www.etax.gov.bc.ca/btp/eservicesReg/_/
If you do not have a PST number, you will need to fill out an exemption certificate, available for gifting a vehicle, children’s clothing and footwear, purchase of a vehicle or aircraft for use outside of B.C., multi-jurisdictional vehicle, self-assessment on software, commercial fisher, aquaculturist, farmer, out of province delivery, general, contractor, production machinery and equipment, and subcontractor.
If you need more information, visit the B.C. provincial sales tax website at: http://www2.gov.bc.ca/gov/topic.page?id=589542DDDB6347F7A7C80C1783F4BA6D.