Whether you’re a consumer who regularly purchases goods and services or an entrepreneur who runs a business in BC, it’s good to know what type of sales tax you’ll pay or have to charge your customers.
Every province and territory has its own type of sales tax. Read on to find out more about the type of sales tax that applies in British Columbia
Sales Tax In British Columbia
In BC, both a 7% Provincial Sales Tax (PST) and a 5% Goods and Services Tax (GST) are applied to most purchases, for a total of 12% in total sales tax.
How To Calculate Sales Tax In British Columbia?
Let’s illustrate how sales tax in BC is calculated.
If you’re buying a product at a pre-sale price tag of $50, the total sales tax and price would be as follows:
$50 + (7% PST + 5% GST)
= $50 + ($3.50 + $2.50)
= $50 + $6
= $56
In the above example, the total sales tax would come to $6, and the total price paid would be $56.
Sale Tax Exemptions in British Columbia
Not all goods and services in BC are charged PST. Certain exemptions apply, including the following.
First Nations
Registered First Nations are exempt from PST for goods and services bought on First Nations lands.
Zero-Rated Items
Products and services that fall under the following categories are exempt from PST in BC:
- Basic groceries and prepared foods
- Books, magazines, and newspapers
- Children’s clothing and shoes
- Car seats and booster seats
- Bicycles
- Prescription medications, medical products, and household medical aids
- Pet services (ie. vet visits)
Other Items
Other exemptions to PST are available under various circumstances, though documentation may be required:
- Adult-sized clothing and shoes for children under the age of 15
- School supplies for students
- Safety equipment
- Protective clothing
- Farming, fishing, and fertilizers
- Goods purchased for lease or resale
- Used zero-emission vehicles
PST Rates In British Columbia
The general PST rate is 7%, though it may be different for specific items, as described in the chart below:
| Item | PST Rate |
| Cannabis products Soda beverages (with some exceptions) Software Legal services Telecommunication services | 7% |
| Liquor | 10% |
| Accommodation (except additional Municipal and Regional District Tax) | 8% |
| Vaping products | 20% |
| Vehicles | Rates vary |
| Portable buildings | 7% of 45% of the purchase or market value |
What Is An ICE Fund Tax?
On top of the 7% PST, a 0.4% tax is applicable to energy products. The purpose of this additional tax is to increase revenue for the Innovative Clean Energy (ICE) Fund.
The ICE Fund tax applies to the following:
- Natural gas (except natural gas bought in BC, or brought into BC, to be used in stationary internal combustion engines).
- Fuel oil (except kerosene) to be used to heat, cool, or raise steam.
- Propane delivered in vaporized form by a public utility under the Utilities Commission Act, by pipe, or to buyers at the place where the propane will be used.
Anyone who sells fuel oil, natural gas, or propane on a grid system must charge the ICE Fund tax to residential, industrial, and commercial customers. This tax must then be claimed on PST returns.
The PST and the ICE Fund tax are calculated separately.
For instance, if an energy product costs $50, the taxes would be calculated as follows:
$50 + (7% PST + 0.4% ICE Fund tax)
= $50 + ($3.50 + $0.20)
= $50 + $3.70
= $53.70
What Happens If You Make A Purchase Online From A Store In Another Province?
How sales tax is charged is more complex when it comes to buying products online from outside BC. However, it’s the duty of the merchant to apply the appropriate sales tax. So, as a buyer, you don’t have to worry about which sales tax to pay, as the merchant will charge you accordingly.
In general, if you buy a product or service from a vendor in another province or territory, you’ll pay the sales tax rate of the province or territory where the product will be delivered or where the service is carried out. If you live in BC, that means you’ll pay BC’s sales tax.
What Happens If You Buy A Product From An Ontario Merchant?
If you live in BC, and you’re buying a pair of shoes online from a merchant in Ontario, you’ll still end up paying BC taxes. Even though the shoes are coming from a different province, they’re still ending up in BC where you live. In this case, you’ll be required to pay the sales tax as applied in BC (7% PST and 5% GST), not the sales tax in Ontario.
However, if you’re visiting Ontario, and you buy a pair of shoes at a brick-and-mortar store, you’ll pay 13% HST (the sales tax applicable in Ontario), instead of the sales tax applied in BC.
Do You Qualify For The GST/HST Tax Credit in British Columbia?
In addition to your federal income tax, you must also calculate and pay provincial income tax. However, you might be entitled to provincial credits in addition to federal credits.
Each provincial government has its own tax laws and regulations, but the Canada Revenue Agency (CRA) collects individual income taxes for all provincial governments (except Quebec). For the province of BC, a GST/HST credit may apply, which is a non-taxable amount paid quarterly to low-income individuals and families to help offset the amount paid in GST/HST.
Eligibility Criteria For GST/HST Credit
In order to qualify for the GST/HST tax credit, you must meet the following criteria:
- Be a resident of Canada at the start of the month when the CRA makes a payment.
- Be at least 19 years old in the month before a quarterly payment is made.
- Have/had a spouse or common-law partner in the month before a quarterly payment is made.
- Are/were a parent and live/lived with your child in the month before a quarterly payment is made.
GST/HST Tax Credit Payment Dates In British Columbia
The payment dates for the GST/HST tax credit for 2024 are as follows:
- January 5, 2024
- April 5, 2024
- July 5, 2024
- October 4, 2024
Notes, these payments may be combined and paid out with other government benefits you qualify for, such as the BC Climate action tax credit or the Canada Child Benefits. These payments may show up on your bank statement as a Fed-Prov/Terr Canada or as Canada FED.
Other British Columbia Tax Credits
You may also qualify for other tax credits in BC:
BC Child Opportunity Benefit (BCCOB)
The BC child opportunity benefit (BCCOB) is a tax-exempt payment made on a monthly basis to families with children under 18 years of age. This program is paid out in combination with the Canada Child Benefit (CCB). The amount you receive depends on your income and the number of children you have.
BC Climate Action Tax Credit (BCCATC)
The BC climate action tax credit (BCCATC) is a tax-exempt payment made to lower-income households to help offset the amount paid in carbon taxes. You don’t have to apply for this credit, you’re automatically considered when you file your income taxes.
If you qualify for the credit, you’ll receive the payments quarterly on July, October, January and April.
Sales Taxes and Businesses in British Columbia
If you operate a business in BC, you’ll need to know how to charge tax when you invoice customers and vendors.
PST Registration
If you’re located in BC, you must register to collect and pay PST.
In some cases where you’re not located in BC, you may still have to register for PST if any of the following apply to you:
- You make sales to customers in BC
- You make sales of exclusive products to independent contractors in BC for resale
- You sell accommodations in BC
- You list accommodations for sale in BC on your online platform
- You enter into agreements to improve real property if your customers agree to pay PST
If you’re not required to register for PST, you might still choose to do so in order to use your PST number to take advantage of exemptions that may apply to you.
Find Out How To Get A:
Small Sellers
You are not required to register for PST if you qualify as a small seller. Instead, small sellers pay PST when buying products for resale and don’t collect PST on sales.
A small seller is a business that is characterized by the following:
- It’s located in BC
- It does not regularly sell products from established business premises
- It does not maintain a physical business premise
- It generates gross revenues of $10,000 or less from all retail sales of eligible products, services, and software over the previous 12 months
Sales Tax in British Columbia FAQs
Which province charges the highest sales tax?
How much are GST and PST in BC?
What is the sales tax in Vancouver?
Final Thoughts
If you’re a consumer who lives in BC, it’s good to know how much you can expect to pay in sales tax on top of the pre-tax prices of goods and services. And if you run a business in BC, it’s your responsibility to know what type of tax to charge your customers.
