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COVID-19 Action Plan - Provincial Tax Changes
BC 2020 Budget - February 18, 2020
All budget proposals are subject to legislative approval.
Bill 4, Budget Measures Implementation Act, 2020 was tabled on February 18, 2020 and received Royal Assent on August 14, 2020.
Personal Income Tax
The budget proposes to add a new tax bracket for taxable income over $220,000, with a tax rate of 20.5%, effective for the 2020 tax year. Currently, the highest tax rate is 16.8%. The threshold of $220,00 will be indexed in 2021 and subsequent years. The tables of marginal tax rates have been revised.
BC now has 7 tax brackets, while no other province or territory has more than 5.
The higher tax rate of 20.5% would apply to charitable donations over $200 in respect of the individual's income subject to the higher tax rate. The current rate is 16.8% for donations in excess of $200.
If the individual has taxable income of less than or equal to $220,000, the rate for donations over $200 remains at 16.8%. For instance, if an individual has taxable income of $240,000 and makes a donation of $25,200, the tax credit is calculated as 5.05% x $200 plus $20,000 x 20.5% plus $5,000 x 16.8%. This will likely apply only to donations made after 2019. Donations made before 2020 and claimed in 2020 or a later year are likely not eligible for the 20.5% tax rate.
The above changes are now included in the Detailed Canadian Income Tax and RRSP Savings Calculator, the Basic Tax Calculator, and the Investment Income Tax Calculator.
Corporate Tax Credits
BC training tax credits are extended for 3 years to the end of 2022.
The BC farmers' food donation tax credit is extended for 3 years to the end of 2023.
Changes are also proposed regarding the production services tax credit, and the Film Incentive BC (Film and Television Tax Credit).
Provincial Sales Tax
Effective July 1, 2020, carbonate beverages containing sugar or natural or artificial sweeteners will no longer qualify for the PST exemption for food products for human consumption. This will include beverages dispensed through soda fountains, soda guns or similar equipment, as well as those dispensed through vending machines, unless the vending machines are wholly dedicated to dispensing beverages other than sweetened carbonated beverages, such as coffee or water machines.
April 1, 2021 clarification in Budget 2021: the exemption for water does not apply to beverages taxed under these soda beverage measures.
PST on Telecommunication Services - postponed re COVID-19 to April 1, 2021
Telecommunication services are taxable in BC, and this is not a recent change. However, there previously was no requirement for a provider of telecommunications services located outside of BC to be registered to collect PST when providing services to a person in BC. Effective July 1, 2020, Canadian sellers of goods and Canadian and foreign sellers of software and telecommunication services will be required to register to collect PST if their BC revenues exceed $10,000. This would include streaming services such as Netflix, Amazon Prime, Hulu and other services.
Other PST Measures
PST registration will also be required for all Canadian sellers of vapour products who cause these products to be delivered to BC purchasers.
See Sales Tax Measures for information on these measures, and other measures related to
- pollution control and waste management machinery and equipment,
- electric aircraft,
- real property contractors,
- motor vehicle dealers,
- multijurisdictional vehicles,
- leases, bundled leases, and related services.
Carbon Tax - postponed re COVID-19
The budget proposes to revise the carbon tax rates effective April 1, 2020 and April 1, 2021. The rates will differ from the rates previously set in 2017. See Carbon Tax Rates By Fuel Type (pdf).
For information on all tax changes see BC Provincial Budget Tax Changes.
The budget proposes to introduce a new up-front, needs-based student grant program effective September 2020. The new BC Access Grant will replace and expand eligibility for existing grant programs.
For students in programs under 2 years in length, a BC Access Grant of up to $4,000 per year will be available.
For students in programs of 2 years or longer, a BC Access Grant of up to $1,000 per year will be available, to supplement the Canada Access Grant of up to $3,000 per year.
See Budget 2020 on the Ministry of Finance website for complete budget details.
Revised: July 31, 2023
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