The new PST sales tax proposed by the BC NDP will cover sales of online purchases, used cars and home heating systems that use fossil fuels.
Online Marketplace Tax
The online marketplace tax will apply to goods or services purchased online by anyone in B.C. or and supplier selling good or services from a individual residing or business registered in B.C.
Effective July 1, 2022, certain marketplace facilitators must charge and collect PST
on taxable sales and leases that they facilitate through an online marketplace. The marketplace facilitators must also charge PST on online marketplace services.
A marketplace facilitator is a person who:
- operates, owns or controls (solely or jointly) an online marketplace,
- through the online marketplace, facilitates a marketplace seller’s retail sales of
- goods, software or taxable services, and
- collects payment in respect of the retail sales of goods, software or taxable
Online Marketplace Services
Effective July 1, 2022, an online marketplace service is a taxable service for PST purposes at the rate of 7%. This means certain persons selling taxable online marketplace services will be require to register to collect and remit PST.
On a Government of B.C. document Provincial Sales Tax (PST) Bulletin describe the Online Marketplace Services as any of the following services provided by a
marketplace facilitator, or by an agent, partner, joint venturer or associated
corporation of the marketplace facilitator, to a marketplace seller.
- Listing sales of goods, software or sales of taxable services
- Advertising or promoting
- Customer service
- Fulfilling orders or bookings
- Collecting or facilitating payments, either directly or indirectly, and transferring payments to the marketplace seller
- Accepting or assisting with cancellations, changes, returns or exchanges of goods, software or taxable services
- Other services to facilitate an online marketplace seller’s sale of goods, software or taxable services through the online marketplace.
According to the BC NDP Budget and Fiscal Plan using old out of date data from 2018, 93% of internet users with a annual household income greater than $125,000 purchased goods online compared to about 70% of those with a household income less than $40,000
There is a threshold at which point the suppliers of goods or services will need to register and start collecting PST if the “preceding 12 months was $10,000 or less” or “for the next 12 months is reasonably estimated to be $10,000 or less.”
Who pays the marketplace PST
Effective July 1, 2022, the following purchasers must pay PST on online
According to the budget plan. This obligation will apply to sales of taxable goods shipped from within Canada, taxable services (including short‑term rentals and other taxable accommodation, but not including legal services), software and leases of goods made through a marketplace facilitator. Sellers will be relieved of their obligation to collect and remit tax on sales and leases made through a marketplace facilitator.
It appears anyone buying used goods on marketplaces such as Amazon or eBay will be subject to pay PST on their purchases.
Private vehicle sales tax
Effective October 1, 2022, tax on private sales of motor vehicles will be based on the
greater of the reported purchase price and the average wholesale value of the vehicle.
According to the BC NDP budget plan this tax is more likely to impact males of rural areas in the “low to medium” income range.
Exemption for Tobacco Removed
Effective July 1, 2022, provincial sales tax is applied to tobacco.
According to BC NDP budget plan men have the highest smoking rates and this extra tax will mostly impact “men and lower-income individuals”
Fossil fuel heating and cooling
Effective April 1, 2022, the provincial sales tax on a fossil fuel combustion system that heats or cools buildings or water is increased from 7 per cent to 12 per cent.
You can find the Government of B.C. pst small business guide here