HST
in BC ended on March 31, 2013, and the BC Provincial Sales Tax (PST) was re-implemented effective April 1,
2013.
A taxable service, in BC, includes:
legal services
accommodation
telecommunication services - see Bulletin
PST 107, which also lists exemptions
is any service provided to install,
assemble, dismantle, repair, adjust, restore, recondition, refinish, or
maintain tangible personal property, but does not include a
service:
provided to install tangible personal property that
will become real property on installation,
provided by a person to that person's employer in the
course of employment.
Accounting services, including bookkeeping and assurance services
Architectural, engineering and geoscience services, on 30% of the
purchase price
Security services, including private investigation services
Non-residential real estate services, including trading services,
rental property management services and strata management services
Tangible personal property (TPP) means
personal property that can be seen, weighed, measured,
felt or touched, or that is in any other way perceptible to the senses, and
includes natural or manufactured gas,
electricity,
heat
affixed machinery, and
an improvement to real property or part of an improvement
to real property that is removed from the site at which it is affixed or
installed, while it is removed from that site
Examples of taxable services to tangible personal property would be repairs
or maintenance of automobiles, furniture, computers, televisions, watches, and
business equipment.
An example of tangible personal property that will become real property on
installation would be windows, doors, hot water tanks, etc. These will
be attached and part of the house, which is real property. If these
items are purchased uninstalled, there would be PST paid on the purchase
price. If they are purchased from a supplier/contractor who also installs them, and
the supplier charges one lump sum for the supply and installation, in the old
PST system there was no
PST applied to the lump sum contract. Under the new legislation, if the
supplier/contractor pays PST when purchasing the tangible personal property,
then tax will not be applicable to the supply of the property (s. 80 of the
Provincial Sales Tax Act). If the contractor does not want to pay the
PST when purchasing the tangible personal property, then the contract for the
supply and installation must specifically state that the end purchaser is
liable for PST on the price of the property, and the price of the property
must be set out in the contract.
The BC Government announced in June 2023 that it intends to introduce
legislation as part of Budget 2024 that will retroactively support the
application of PST to cloud service providers and their customers. This
decision was in response to the BC Supreme Court case Hootsuite Inc. v.
British Columbia (Finance), 2023 BCSC 358. For more information on this
see B.C.
Update: Retroactive Legislation To Reverse Court Decision And Tax Cloud
Services by Zvi Halpern-Shavim and Elena Balkos of Blake, Cassels
& Graydon LLP.