Provincial sales tax (PST) – Broadening PST registration requirements in the western provinces

Over the past few years, the growth of e-commerce led many provinces to extend their registration requirements for non-resident businesses which sells taxable goods and services on their territory to register for their PST. Just like Quebec in 2019, Saskatchewan and British Columbia have decided to expand their registration requirements.

Context

The provinces of Manitoba, Saskatchewan and British Colombia use a retail sales tax system whereby the end consumer pays the tax. This PST usually applies on tangible goods and specifics services.

Saskatchewan

In May 2018, Saskatchewan amended its PST law to expand its registration requirement for non-resident vendors that do have a physical presence in the province. These new requirements are applicable on or after April 1, 2017.

Thus, businesses located outside of Saskatchewan which are selling taxable goods are required to register if they accept purchase orders and deliver goods in Saskatchewan. The need to solicit by advertising or other means has been eliminated.

In its most recent budget, the province also announced new measures that require online platforms, such as Amazon and Airbnb, to register for PST. Bill No. 211, which outlines these amendments, was passed on July 3, 2020, and is retroactive to January 1, 2020. Vendors who makes retail sale by way of an online platform registered for PST will not need to register.  

British Columbia

In its 2020 budget, BC announced that it would amend its PST law to expand registration requirement for non-resident vendors who do not have a physical presence in the province. These new requirements will be effective on April 1, 2021.

More specifically, Canadian businesses that sell and deliver tangible goods in British Columbia will be required to register for PST (unless they sell exclusively–100%–to resellers).

The province also announced that all businesses (Canadian or non-resident) that sell software or telecommunication services for use in BC will also be required to register for PST.

The province introduced the small supplier concept. Generally, a business will not be required to register for PST if its annual sales are under $10,000. 

Benoit Vallée, CPA, CGA
Partner – Indirect Taxes
Demers Beaulne
Member of the Technical Working Group – Taxation and Commodity Taxes