Return of PST frustrates business
The provincial sales tax is set to go back into effect on April 1 following a massive public backlash and referendum on the implementation of the harmonized sales tax.
Now, less than three years after the provincial government made the switch, the return to the PST is frustrating one Delta business.
Mattias Tobias, senior project manager at International Marine Floatation Systems in Tilbury, says the process will cost them thousands of dollars.
“If we supply and install something we have to treat the PST one way and if we just supply something we have to treat it another way,” he said.
If that sounds confusing it’s probably because it is. Tobias said they’ve had issues with provincial auditors using their interpretation of each contract in a different way that makes the tax process difficult to understand.
“Our life is so easy right now because we just pass on the HST,” he said.
Under the HST companies are able to write off business inputs through their taxes—such as buying supplies or materials—whereas under the provincial tax that expense is passed on to the consumer.
Once the PST goes back into effect, the company will have to add in the cost of the PST during an estimate.
“So, the price will go up certainly,” said Tobias. “Right now many of our clients are trying to get us to supply everything before March 31 so they can get the benefit of the HST.”
One problem the company experienced under the PST was when a customer asked for a product to be supplied, but then later requested installation after they’ve already received the cost estimate. The company would then be forced with the unpleasant choice of billing the customer more or swallowing the cost of the PST.
A new PST notice was issued to businesses in October providing general descriptions of transition rules for re-implementation.
The transitional rules describe how and when PST applies to transactions that straddle April 1, 2013, and should be read in conjunction with federal transitional rules for the elimination of the HST in B.C.
Interactive webinars are being held from 10:30-11:30 a.m. on Jan. 22, and 24 and people can register at www.gov.bc.ca or www.PSTinBC.ca.