PST Guide for BC Businesses
Complete guide to BC's Provincial Sales Tax — registration, exemptions, filing, and common compliance mistakes.
British Columbia's Provincial Sales Tax (PST) applies to most goods and some services sold or used in the province. Unlike the GST which is administered by the CRA, the PST is managed by the BC Ministry of Finance. If your business sells taxable goods or services in BC, understanding when to register, what to charge, and how to file is essential to staying compliant.
PST Registration Threshold
You must register for PST if you sell or lease taxable goods or services in BC and do not qualify as a small seller. A small seller is a business whose total worldwide taxable sales (excluding GST) are $10,000 or less in any 12-month period.
Once your sales exceed $10,000, you must register within 30 days. Registration is done through BC's eTaxBC portal. There is no fee to register, but you may need to post a security deposit (typically 25% of your estimated monthly PST collections) if you have a history of non-compliance.
What's Taxable and What's Exempt
- Taxable: Most tangible personal property (furniture, electronics, clothing over $150, vehicles), prepared food and beverages, accommodation (hotels, Airbnbs), telephone and internet services, and entertainment admissions.
- Exempt: Basic groceries (unprepared food), children's clothing and footwear (under $150), bicycles and bicycle parts (PST-free since 2024), prescription drugs and medical devices, books and magazines, and manufacturing machinery and equipment.
- Services: Most services are PST-exempt in BC, including professional (legal, accounting, consulting), repair, and personal care services. However, some specific services are taxable — accommodations, telecommunications, and certain software services.
Children's clothing and footwear up to $150 per item is PST-exempt. For adult clothing, all clothing is PST-exempt up to $150 per item — the portion above $150 is taxable. This creates complexity at the cash register and in e-commerce checkout systems.
Filing Frequency and the eTaxBC System
PST returns are filed through BC's eTaxBC system. Filing frequency depends on your annual PST collections:
— Monthly: if you collect more than $1,200 PST per year.
— Quarterly: if you collect between $300 and $1,200 per year.
— Annually: if you collect less than $300 per year.
Returns are due one month after the end of the reporting period. Late filing triggers a 10% penalty on the amount owing, plus interest at the prescribed rate (currently 5% per year, compounded daily).
Common Exemptions and Input Tax Credits
- Businesses can purchase goods for resale PST-free by providing their PST number to suppliers at the time of purchase — this is called purchasing with a Certificate of Exemption.
- Manufacturers and processors can buy machinery and equipment PST-free under the Production Machinery and Equipment (PM&E) exemption.
- There is no PST input tax credit system like the GST — you simply do not pay PST on exempt purchases. If you pay PST by mistake, you must apply for a refund from the BC Ministry of Finance, not claim a credit.
PST Audits and Penalties
The BC Ministry of Finance conducts PST audits regularly, particularly for businesses with high-volume transactions (restaurants, retailers, construction). An audit typically covers the previous four years.
Common audit findings include: charging PST on exempt items (triggering refund obligations), failing to charge PST on taxable items (leading to assessments), and failing to remit collected PST. Penalties range from 10% to 25% of the unreported amount, plus interest. Businesses that self-report errors before an audit starts may receive penalty reductions.
Key Takeaways
- 1Register for PST within 30 days of exceeding $10,000 in annual taxable sales.
- 2Most goods are taxable; most services are exempt — know the difference for your product mix.
- 3File through eTaxBC — frequency depends on your annual PST collections.
- 4Businesses can buy goods for resale PST-free using a Certificate of Exemption.
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