What Amount Of Sales Do I Have To Register For PST?

By Randall Orser | Personal Income Tax

Taxes File On Laptop Shows Taxation TNIn it’s infinite wisdom, the British Columbia government reverted back the Provincial Sales Tax (PST) back in April 2013. So, now we have to decide if 1) you’re supplying a taxable good or service and 2) what are you annual sales. This post is mostly about the amount of sales that you need to make to register for the PST.

Lets say that you’ve already determined that you have a good or service that is subject to the PST. You haven’t registered yet as you’re not sure what your sales will be for the following year.

You are not required to register if you qualify as a small seller. As a small seller, you do not charge or collect PST on sales; however, you are also ineligible for certain PST exemptions, such as the exemption for goods purchased for resale or for incorporation into other goods for resale. You have $10,000 or less in gross revenue from all retail sales of eligible goods, software and services for the previous 12 months, and your estimated gross revenue from all retail sales of eligible goods, software and services for the next 12 months is $10,000 or less

If you qualify as a small seller, you have the option of registering with the ministry to collect and remit PST. Registering for PST can be advantageous because it allows you to purchase goods for resale (or for incorporation into other goods for resale) exempt from PST. If you choose to register with the ministry, you will no longer be considered a small seller and must charge and collect PST.

This is where people get confused, once you register to collect the PST, you must always charge PST on your taxable sales. Even in those years where you dip below the $10,000 you MUST still charge PST as you are registered, no exceptions. If you’re finding you are not meeting the $10,000 limit over a couple of years, and have no plan to get over that amount then you can deregister. If you do deregister, you will have to now pay PST on anything you purchase, even if it’s for resale.

In the end, I think it’s best to just register for the PST, and get used to charging it. Your clients are used to paying it, and, many times, people get confused when they’re not charged taxes; perception is everything in business.

Examples of When You’re Required to Register

In the ordinary course of your business, you:

  • Sell taxable goods like alcoholic beverages, motor vehicles, boats, building materials, household or office furniture
  • Lease taxable goods like motor vehicles, tools and equipment, aircraft and art work
  • Provide services to taxable goods like:
    • Repairing or maintaining automobiles, knives, watches, TVs
    • Applying protective treatments like fabric protection
  • Sell software
  • Provide legal services or telecommunication services
  • Provide four or more units of accommodation

Examples of When You Don’t Need to Register

  • You sell only non-taxable or exempt goods like food for human consumption, bicycles or children’s clothing
  • You provide only non-taxable or exempt services like transportation or dry cleaning services
  • You’re a wholesaler

About the Author

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