PST/GST: Back to the future begins April 1
By Nelson Daily Staff
By Suzy Hamilton, The Nelson Daily
In a nutshell, it’s a headache. But there’s lots of help for the retail business sector from Community Futures, the Nelson and District Chamber of Commerce and the provincial government as it re-implements the PST/GST tax system by April 1.
In August, 2011, British Columbians voted to eliminate the HST and return to the provincial sales tax (PST) plus federal goods and services tax (GST) system.
Now it’s time to bring back the two taxes back.
“We want to make sure they have all the current information,” says Ministry of Finance spokesperson Jamie Edwardson. He said the new tax system will be more streamlined than the previous system before 2010.
The government is offering a number of ways to comply with the new system, including seminars, web pages and one-on-one tax advice with accountants. Go to http://www2.gov.bc.ca for more information.
“Absolutely, we’ll even take phone calls,” said Edwardson. “People mostly have questions on how the tax treatment applies to them.”
Interest is high in Nelson. Community Futures on Vernon Street is offering a second afternoon seminar April 1 for businesses, as the first one February 21 filled.
Travelers, home buyers, book lovers and bicyclists are a few of the customers who will benefit from the new old tax, as those items are now exempt from the 7 percent PST.
This is good news for the consumer who only pays 5 per cent tax,, but not for the business owner, who covered the cost of switching to the federal harmonized tax (HST) in 2010 and now must switch back in 2013.
“It’s a nightmare,” says Gerick Cycle and Sports owner Ross McNamara. “But the good news is that bike prices will go down.”
Classified as “fuel saving devices,” by the provincial government, the feds refused to honor the exemption and bike prices went up “overnight” when the HST came in, says McNamara.
“We protested, but to no avail.”
As of April 1, bike prices will not be taxed an additional seven percent.
You won’t get a break from your lawyer, however. Legal services, unlike most professional services, will still be taxed 12 percent.
It is estimated that with the exemptions the provincial government will lose about $820 million next year (www.pstinbc.ca) in addition to repaying the federal government more than $1 billion in HST start-up benefits from the tax switch.
Notable exceptions to the 12 per cent taxes are alcohol, which remains taxed at 15 percent and hotel rooms at 13 per cent.
Tom Thomson at the Nelson and District Chamber of Commerce said that according to provincial information, 63 per cent of BC is not prepared for the switch.
“It’s challenging for businesses to understand the rules,” he said. “You’ve got two governments to deal with.”
His advice to retailers:
”Go out and buy a good Bob Marley record, put it on and study all the information available on the net.”
Help, he said is available from the Chamber of Commerce.
Call 250-352-3433.
To sign up for the April 1 tax seminar, call Community Futures, 250-352-1933 x100.
Other resources are the Nelson and District Seniors Coordinating Society that offers free income tax preparation for low income residents. Sources there said the new taxes will have no impact on 2012 tax returns.
For information on how the PST/GST will affect you, call the society at 250-352-6008.
There will be three ways businesses can have their PST questions answered:
One-on-one consultations with a ministry tax specialist – submit a request online.
Calling with questions toll-free to 1-877-388-4440.
Emailing questions to [email protected]
