For help using eTaxBC, please see our eTaxBC Frequently Asked Questions.
The PST rate will be 7% except in certain cases. See the tax rate table on our Return to PST page.
Yes. Under an agreement with the federal government, the Province will have five years to repay in full the transition funding, and the federal government has agreed to waive any interest charges over this period.
Under federal HST transition rules, service providers are required to charge HST on services consumed in April if the invoice for that service is issued before April 1, 2013. This is because the HST is actually due to the federal government on the date the invoice is issued, not the customer’s pay-by due date. Invoices issued after April 1, 2013, would not include HST.
Government does not regulate the timing of invoices issued by businesses or crown corporations. That is a decision of the business themselves.
Any HST collected by businesses on behalf of government must be remitted to the federal government. You can contact the Canada Revenue Agency with your HST questions at 1-800-959-5525 (English) or 1-800-959-7775 (French). Read more questions and answers about the elimination of the HST in BC.
Yes. The legislation and regulations to re-implement the PST are now complete. The final legislative amendments to the Provincial Sales Tax Act have received Royal Assent and the regulations to bring it into force on April 1, 2013 have been approved by Cabinet.
To help businesses prepare for the PST, government is making available the Provincial Sales Tax Act, the Motor Fuel Tax Act and the New Housing Transition Tax and Rebate Act, reflecting the amendments made in Bill 2.
The transitional rules explaining how PST applies to transactions that straddle April 1, 2013, can be found in Bill 2 and are not part of the consolidation of the Provincial Sales Tax Act.
No, this is not the same legislation. The old legislation and regulations were originally introduced over 60 years ago, in 1948. They had been amended, expanded and changed many times and did not keep pace with rapidly changing technology and business practices. This resulted in confusing and frustrating legislation and regulations for taxpayers and tax administrators.
For example, telecommunications and software look far different today than they did even five or 10 years ago.
The new PST is being implemented under a more modern and streamlined Provincial Sales Tax Act that is, for technical taxation legislation, clearer, easier to understand and comply with, easier to administer, and which better reflects modern technology and business practices.
Although the new legislation and regulations will look quite different than the old legislation and regulations, the new PST will apply in substantially the same way that the old PST applied, with all of the same permanent exemptions.
While the old PST applied to software, the language in the old legislation was developed at a time when software was primarily accessed through the purchase of a tangible or physical medium such as a disk.
Modern technology allows most software to be accessed both electronically and remotely, without requiring software to be downloaded onto a device hard drive. The language in the old Act did not directly reflect or address modern technologies, creating difficulties for those required to pay or collect the tax, and for government in administering the tax consistently across various technologies, particularly as technologies changed over time. The PST Act includes provisions related to software that clarify the application of the tax.
The new Act includes specific provisions that reflect the ability to access software electronically and remotely, and to use the same software simultaneously in multiple jurisdictions. For example, businesses will be able to pro-rate PST where they access software for use in multiple jurisdictions.
For more information on the tax on software, read the bulletin Software (PST 105) (PDF).
While the old PST applied to telecommunication services, the language in the old legislation was developed at a time when telecommunication services were more independent from one another.
Telecommunication services have changed substantially with the convergence of various technologies – for example, one device can now be a phone, computer and television.
The language in the old Act did not directly reflect or address modern technologies, creating difficulties for those required to pay or collect the tax, and for government in administering the tax consistently across various technologies, particularly as technologies changed over time.
The Provincial Sales Tax Act better recognizes the different aspects of telecommunication services and provides greater certainty as to the rights, activities and telecommunication content that will be subject to PST. In addition, the tax will be able to be administered more consistently across various technologies.
For more information on the tax on telecommunication services, read the bulletin Telecommunication Services (PST 107) (PDF).
The legal authority for all the exemptions and refunds is in the legislation.
The exemptions and refunds included in the Provincial Sales Tax Act are those that are more fundamental to the overall taxation system as a retail sales tax system. For example, exemptions for goods incorporated into goods for resale.
The details for most exemptions and some refunds will be located in the regulations, such as the details about the exemption for production machinery and equipment.
This approach is generally consistent with the approach taken in other consumption tax Acts.
Where the legislation doesn’t impose tax, a specific exemption isn’t required. For example, because there’s no PST on real property
(i.e. housing) or on admissions or memberships, no specific exemptions are needed.
In December 2012, letters were sent to businesses with information on how to register. If you didn't receive a letter, or are unsure if you need to register, please contact us or refer to our Register to Collect PST page for more information. Registration is now open.
Government has released more than a dozen publications providing plain-language guidance on the general application of the PST, including registration and tax collection, in recently released bulletins, notices and FAQs.
Other return to PST tools and services available to help businesses prepare for the re-implementation of the PST include:
More information about the return to PST and links to publications, tools and services can be found at gov.bc.ca/pst
The tax specialists will explain how the PST will apply to your business and explain your rights and responsibilities under the new Act. The rules and requirements explained come into effect with the re-implementation of the PST on April 1, 2013.
The ministry will respond to requests for written advice once the legislation and regulations are finalized. The ministry will abide by written advice provided in a tax ruling or interpretation letter requested by you, that is specifically applicable to your circumstances as disclosed and in accordance with the law.
No. You will need to apply for a new PST registration number.
Yes. Businesses will need to apply for a new PST registration number.
It is significantly faster to register online. Online applications are generally processed the next business day while completed applications submitted in person or by fax or mail may take up to 3-4 weeks to process. We’ll send you a confirmation letter once your registration is processed.
Note that your application may be delayed if it is incomplete or if we need to contact you for additional information.
The Canada Revenue Agency (CRA), not the Province of B.C., is responsible for federal GST/HST registration numbers. More information on the elimination of the HST, including information on GST/HST numbers, can be found at cra-arc.gc.ca/harmonization/
No. The Certificate of Registration, used under the previous PST system, will not be used under the re-implemented PST. When you register for the PST, you will simply receive a letter notifying you of your registration number. You can use this number to obtain certain exemptions (for example, when purchasing goods for resale).
Yes. If you are registering a partnership, you need to provide all partner names and we request that you provide their driver’s licence or BCID numbers.
Yes. The partnership agreement is required to validate your registration.
Please provide a copy of the partnership agreement and either the incorporation numbers of all partners if they were incorporated in B.C. or a copy of the incorporation certificate for partners incorporated outside B.C.
Yes. To determine your total (or estimated) annual sales, please use your total Canadian taxable and non-taxable sales.
Yes. To determine your “Estimated monthly taxable sales/leases/services in B.C.,” please only use taxable sales/leases of tangible personal property (goods), software and related services, legal services, telecommunication services and accommodation.
Although your sales may vary from month to month, you can calculate your Estimated Monthly Taxable Sales by using your annual sales from the previous year and dividing by 12 months. This figure is only used to help determine the reporting period (e.g. monthly, quarterly, semi-annual or annual) for sending in your tax returns.
If you only operate during a specific season, you can indicate specific months that you will be operating and you will receive tax returns only for those months.
If you stop operating your business for part of the year, you can let us know and you won’t need to submit a tax return during that period.
You can forward any information on mistakes you made during the PST registration process to CTBTaxQuestions@gov.bc.ca or you can contact us by phone at 1-877-388-4440. Make sure to provide your Business Number or your PST registration number. We will either correct your mistakes for you or help you change your own information within the eTaxBC program.
Yes. The $1.5 million sales threshold for mandatory electronic filing and paying PST applies to all Canadian sales - both taxable and non-taxable.
No. You do not qualify as a small seller if you have more than $10,000 in gross revenue from all retail sales of eligible goods (all goods other than liquor, vehicles, boats or aircraft), software and taxable services for the previous 12 months. Your estimated gross revenue from all sales of eligible goods, software and taxable services for the next 12 months also cannot be more than $10,000.
No. You do not qualify as a small seller if you have more than $10,000 in gross revenue from all retail sales of eligible goods (all goods other than liquor, vehicles, boats or aircraft), software and taxable services for the previous 12 months. Your estimated gross revenue from all retail sales of eligible goods, software and taxable services for the next 12 months also cannot be more than $10,000.
You also do not qualify as a small seller if you are a lessor of goods, a real property contractor or a person who sells accommodation.
Yes. If you sell taxable goods in the ordinary course of your business, you need to register to collect PST.
There is an exception for small sellers, if your total sales are $10,000 or less and you meet other conditions.
For more information on registration, read the bulletin Registering to Collect PST (PST 001) (PDF).
Yes. As an accountant, you are able to register online for your clients through eTaxBC. On Step 7, you will confirm that you are a third party with permission to register your client’s business. Your client does not need to sign a permission form.
No. You can have multiple liquor licenses under one PST account.
Yes. You can disregard the registration letter if you are no longer in business. If you wish to be removed from our mailing list, please send a cancellation message to PST.Outreachproject@gov.bc.ca
No. Businesses with at least $1.5 million in total Canadian sales per year are required to file tax returns and remit (pay) PST electronically.
You may use any of the following options to remit tax electronically:
To file returns electronically, you must use either eTaxBC or your financial institution’s payment and filing service.
Your reporting frequency is based on how much PST you regularly collect. You have the option to report quarterly if you collect $12,000 or less in PST per year. If you collect more than $12,000 in PST, you must report monthly. If you sell liquor, you also must report monthly regardless of how much PST you regularly collect.
For more information on remittance dates, read the bulletin Charging, Collecting and Remitting PST (PST 002) (PDF).
Use of electronic filing for returns and payments will be mandatory for businesses with total Canadian sales or leases over $1.5 million annually; approximately 10 % of PST registrants. This is similar to current GST/HST filing rules. Those under the threshold can still choose to file returns by paper. Businesses can enroll for access to online services through eTaxBC.
Learn more about reporting and paying PST electronically.
Yes. As with the previous PST, where a bill, invoice, receipt or similar document is issued by a person required to charge PST on a taxable sale or lease, the PST must be shown separately.
Yes. Businesses with accounting periods that do not correspond to calendar months, such as businesses with 13-period fiscal years, can request PST reporting periods that match their accounting periods.
The business must first register to collect PST, then request the change to the reporting periods. To make this request, email us at CTBTaxQuestions@gov.bc.ca or log on to eTaxBC and send us a message through the secured messaging service.
The request must include:
The requested reporting periods must correspond to the business’ accounting periods and must be 28 to 35 days long; however, the first and last period in the fiscal year can be shorter than 28 days if necessary. The request must be made before the business’ fiscal year begins, with the exception of businesses whose fiscal year straddles April 1, 2013, when the PST is re-implemented. Businesses must reapply annually.
If the request is approved, the PST filing due date for the business’ new reporting periods will be 30 days after the last day in each reporting period. For example, if the reporting period ends on
May 23, 2013, the PST return and payment are due no later than June 22, 2013.
No. Businesses that are required to be registered to collect and remit PST (collectors) must get specific information and/or a declaration in a form acceptable to the director before they can provide certain exemptions. The ministry has developed new exemption certificates for certain exemptions that require information and/or a declaration. See our Tax Exemptions page for the available exemption certificates.
The exemption certificates are designed so your customer will provide all the required information and/or the declaration to receive the exemption. To show why you did not collect tax on sales and leases where information and/or a declaration is required, collectors must obtain a completed exemption certificate prior to the sale or lease and must keep a copy of the certificate in their records.
Collectors who wish to develop or accept an alternate version of the exemption certificates must ensure the required information and declaration statement as provided by the ministry on the new exemption certificates is included.
If you previously developed your own version of an exemption certificate, you may only continue to use your version if you update it to include the required information and declaration statement provided by the ministry on the official certificate. Providing the required information and declaration in an electronic format is acceptable if the format includes an electronic signature. The electronic signature may include the electronic acceptance or agreement of the declaration statement or a statement indicating that transmission of the information and declaration by the purchaser or lessee is the electronic agreement of the declaration.
Please note: To provide certain exemptions, you are required to obtain your customer’s PST registration number or, if they do not have one, a completed exemption certificate. These exemptions include:
If you issue a bill, invoice or receipt to a customer, you must record their registration number on the bill, invoice or receipt to show why you did not collect tax. Alternatively, you may record your customer’s PST number on a written agreement that you have entered into related to that sale.
More information about exemptions and the specific documentation requirements for businesses to provide exemptions will be available in the near future.
Yes. Although the old Certificate of Exemption as a Farmer (FIN 465) has been replaced by a new certificate, you may continue to accept the old certificate for exempt sales of coloured fuel to farmers until October 1, 2013. Alternatively, you may obtain a copy of the farmer’s valid BC Farmer Identify Card to support the exempt sale.
Effective April 1, 2013, the old certificate can’t be used for exempt sales of propane, or for farming equipment or other goods exempt of provincial sales tax (PST). To provide an exemption for these sales, you must obtain from the farmer either the new Certificate of Exemption – Farmer (FIN 458) (PDF) or a copy of a valid BC Farmer Identity Card.
The information required will depend on the specific exemption. Certain exemptions are available to all purchasers such as the exemptions for food for human consumption, water, bicycles and books. These items may be purchased without a person providing any specific information. However, some exemptions are only available to certain purchasers in certain circumstances and specific information may be required to substantiate the exemption.
Learn more on our Tax Exemptions page.
To substantiate an exemption from PST on specified goods used for a farm purpose, a qualifying farmer will be required to provide to the seller or lessor of the goods either their Farmer Identity Card issued by the BC Agriculture Council or a completed declaration form.
If the seller or lessor does not obtain the farmer’s name, address, card number and expiry date from the card or does not obtain the completed declaration form, the seller or lessor will be required to collect the PST on the sale or lease of the goods.
Read the Farmers bulletin (Bulletin PST 101)(PDF) for information on qualifying farmers and the specified goods that are exempt from PST.
Go to our Tax Exemptions page for the new exemption certificate for farmers.
The otherwise taxable lease of a good, other than a lease of an interjurisdictional conveyance or goods brought into BC for temporary use, will be exempt from PST if:
If all three conditions are not met, the lease of the good will be subject to PST. As previously required for the similar exemption under the Social Service Tax Act, if you lease goods subject to PST to a person who claims to be eligible for this exemption, you must still collect and remit PST on the lease price, unless the person provides you with information or documents to substantiate the original purchase of the good by the person and the person’s payment of tax on the original purchase of the good.
If you are a small seller, you pay PST when purchasing products for resale and don’t charge or collect PST on sales.
Learn more about small sellers in the bulletin Registering to Collect Provincial Sales Tax (PST 001) (PDF).
For information on how the PST applies to transactions that straddle April 1, 2013, read the notice General Transitional Rules for the Re-implementation of the Provincial Sales Tax (2012-010) (PDF).
If an independent sales contractor sells an exclusive product to a customer on or after April 1, 2013, that was purchased by the independent sales contractor before April 1, 2013, they must charge PST on the sale. If the independent sales contractor paid 12% HST on that exclusive product and has not and cannot obtain a refund, credit or rebate, including input tax credits, of the HST paid, they may keep the PST they collect from the customer.
Learn more about direct sellers and independent sales contractors in the bulletin Registering to Collect Provincial Sales Tax (PST 001) (PDF).
For information on how the PST applies to transactions that straddle April 1, 2013, read the notice General Transitional Rules for the Re-implementation of the Provincial Sales Tax (2012-010) (PDF).
Yes. The general transitional rules for purchases of goods and goods brought into B.C. apply to reusable containers.
Read about the transitional rules in the notice General Transitional Rules for the Re-implementation of the Provincial Sales Tax (2012-010) (PDF).
If you hold goods in your resale inventory (i.e. for sale to customers) that you purchased before April 1, 2013, you do not need to pay PST. If you sell the goods on or after April 1, 2013, you charge PST to your customers unless a specific exemption applies.
However, if you use a good from your resale inventory on or after April 1, 2013 for any purpose other than resale (e.g. for your own business use), you are required to pay PST on your purchase price of the goods, if any consideration for the purchase of those goods becomes due on or after April 1, 2013, and has not been paid before April 1, 2013.
If you use a good from your resale inventory before April 1, 2013 for any purpose other than resale, you are required to pay PST on the consideration for the purchase of that good that becomes due on or after April 1, 2013 and was not paid before April 1, 2013.
Note that there are specific transitional rules for real property contractors. Read about the transitional rules in the notice General Transitional Rules for the Re-implementation of the Provincial Sales Tax (2012-010) (PDF) and in the bulletin Real Property Contractors (PST 104) (PDF).
Out-of-province businesses that are required to be registered to collect and remit PST (collectors) will be required to collect and remit PST on taxable goods they cause to be delivered into B.C.
For information on who is required to be registered for PST, see the bulletin Registering to Collect Provincial Sales Tax (PST 001) (PDF).
A collector is considered to cause delivery of goods into B.C. where the collector:
In all other circumstances in which PST is payable on goods brought, sent or delivered into B.C., including where the person liable to pay the PST retains a common carrier to send the goods to B.C., the PST is required to be self-assessed.
For a list of the circumstances in which goods delivered into B.C. will be subject to PST, see the notice Tangible Personal Property (Goods) Brought into British Columbia (2012-013) (PDF).
The Government of B.C. and municipal governments pay PST and municipal and regional district tax (MRDT), unless the sale or lease is specifically tax exempt under the legislation.
Generally, the Government of Canada is exempt from paying PST on sales and leases of goods and services as long as the relevant department of the federal government provides its PST number. This exemption also applies to the $1.50 per day passenger vehicle rental tax and the 0.4% tax on energy products (ICE Fund tax). Federal government departments often refer to the PST number as the "exemption number.”
Federal agencies as well as all federal employees pay PST on sales and leases of goods and services. This includes:
The Government of Canada, all federal Crown Corporations and agencies, and their employees pay MRDT on sales of short-term accommodation in participating areas of BC. For more information, please see the PST and MRDT Guide for Accommodation Providers (PDF).
For information on sales and leases to First Nation governments, please see bulletin Sales and Leases to Governments (CTB 002) (PDF).
The tax on short term accommodation (formerly the provincial hotel room tax) will be re-implemented at the same time as the PST. The tax rate will be 8%, the same rate as prior to harmonization, and tax will apply in the same way it did prior to the HST.
For more information on the tax on accommodation, read the PST and MRDT Guide for Accommodation Providers (PDF).
The MRDT of up to 2% levied on behalf of participating municipalities, regional districts and eligible entities such as
non-profit tourism associations will continue after April 1, 2013. The MRDT will be incorporated into the PST along with the 8% provincial tax on accommodation. The program will continue unchanged, other than changing the due date for remitting the tax to correspond with the due date for remitting PST (the last day of the month following the reporting period).
For more information on the MRDT, read the PST and MRDT Guide for Accommodation Providers (PDF).
The British Columbia Resort Municipality Initiative provided eligible resort municipalities with a portion of the provincial hotel room tax. When the hotel room tax was eliminated with the introduction of the HST, funding for resort municipalities was continued and will continue under the PST when it is re-implemented.
For newly built homes where ownership and possession transfer on or after April 1, 2013, purchasers will no longer pay the 7% provincial portion of the HST. However, if construction of the new home is at least 10% complete before April 1, 2013, but ownership and possession transfer after that date, purchasers will generally pay a transitional provincial tax of 2% on the purchase price of the new house. If both ownership and possession transfer on or after
April 1, 2015, this temporary tax will not apply.
This transitional tax ensures equitable treatment among purchasers of new houses over the course of the transition between the HST and PST and will help mitigate distortive market behaviour. The new housing transitional rules help ensure the amount of tax payable on a newly constructed home during the transition period is comparable to the amount of tax payable on a home fully constructed under the PST, regardless of when construction begins. The transitional tax and rebate are administered by the Canada Revenue Agency. The CRA has issued a notice with detailed questions and answers.
The provincial property transfer tax may also apply at the time the transfer is registered at the land title office.
Builders are required to provide specific tax-related information to purchasers of new homes where the contract is signed after February 17, 2012, unless ownership and possession of the new home transfer before January 1, 2013.
Depending on the circumstances, the information must either be provided in the written agreement of purchase and sale, or as an addendum to the agreement.
Builders who fail to disclose the required information may incur a penalty.
If you construct new housing and the transition tax applies, and you have paid PST on at least some of the construction materials incorporated into the new housing, you may receive a transition rebate to help offset PST and help prevent double-taxation on home buyers.
The temporary housing transition tax and rebate will be
administered by the Canada Revenue Agency on behalf of the provincial government. For more information on the transitional tax and rebate and the builder information requirements, please see the CRA notice or call the CRA at 1-800-959-8287 (English) or
The temporary transition tax on new housing and rebates will be in place for two years, from April 1, 2013, until March 31, 2015.
Yes. Government has identified the need to adopt the PST tax application for manufactured modular and mobile homes as the tax application for portable buildings.
Portable buildings are buildings designed to be moved from location to location that are not affixed to land and include certain float homes and other floating structures. Apart from float homes, most portable buildings are purchased and leased by businesses for business use such as at construction sites, mine sites and other industrial sites.
Portable buildings do not include manufactured mobile homes or manufactured modular homes.
Taxing portable buildings in the same way as manufactured modular and mobile homes will ensure that the taxation of portable buildings manufactured both inside and outside of B.C. and sold or leased in B.C. is fair and equitable and aligned with the tax treatment of other goods and services under the PST.
Under the new PST, manufacturers of portable buildings will be able to purchase materials to be incorporated into the portable building exempt from PST. Sellers or lessors of portable buildings will be required to charge the 7% PST on 45% of the purchase or lease price. This is consistent with how new manufactured modular and mobile homes sold for use as family residential dwelling units were taxed under the old PST and will be taxed again under the new PST.
The PST rate of 10% on liquor will be reinstated with the re-implementation of the PST. Liquor mark-ups will be reduced to their pre-HST levels to help keep shelf prices constant.
For more information on the tax on liquor, please see the bulletin Restaurants and Liquor Sellers (PST 119) (PDF).
The Innovative Clean Energy (ICE) Fund levy of 0.4% of the purchase price on residential and commercial energy purchases
of natural gas, fuel oil and propane sold on a grid will be
re-implemented in the same manner as before the HST. However, the ICE Fund levy won’t apply to electricity.
The battery levy won’t be re-implemented because an industry stewardship program for the proper recycling and disposal of lead acid batteries was implemented on July 1, 2011.
As part of HST implementation, the basic personal amount tax credit was increased. This enhancement was reversed in the legislation passed with Budget 2012.
With the elimination of the HST, the quarterly BC HST credit will be eliminated and the BC Sales Tax Credit will be re-implemented with the same eligibility criteria and benefit calculation as existed prior to harmonization. Eligible tax-filers will be able to claim the BC Sales Tax Credit when they file their 2013 income tax return.
The provincial portion of the HST on tobacco products will be eliminated with the re-implementation of the PST. To offset this reduction, tobacco tax rates will be adjusted to help keep the overall tax on tobacco constant.
The tax on propane will be re-implemented at the same time as the PST. The tax rate will be 2.7 cents per litre, the same rate as prior to the implementation of the HST.
For more information on the tax on propane, read the notice Propane Purchasers and Sellers (2012-015)(PDF).
The surtax of 1% to 3% on passenger vehicles with a purchase price of $55,000 or more will be re-implemented.
The following transactions are currently subject to the 12% tax on designated property (TDP):
As part of the re-implementation of the PST, effective April 1, 2013, the 12% tax rate on these transactions will continue as PST under the new PST legislation.
Note: the 12% rate will only apply where the sale is not subject to GST. This ensures private sales are subject to a similar tax treatment as sales by GST registered businesses.
Yes. The Passenger Vehicle Rental Tax of $1.50 per day, which raises dedicated revenue for the BC Transportation Financing Authority, will be re-implemented.
Yes. The MJV tax for inter-jurisdictional commercial carriers
licensed under the International Registration Plan (IRP) will be
Carriers who license their multijurisdictional vehicle(s) on or after April 1, 2013, must pay the MJV tax. However, carriers who license their vehicles before April 1, 2013, including vehicles with a licensing period that begins on or after April 1, 2013, don’t pay the MJV tax.
The imposition of the MJV exit tax when an MJV ceases to be licensed under a pro rate agreement has been reviewed.
The Minister of Finance intends to introduce legislation to the Legislative Assembly at the earliest opportunity to amend the Provincial Sales Tax Act retroactive to April 1, 2013, to impose the MJV exit tax only when an MJV is licensed for use solely within B.C. consistent with the MJV exit tax previously payable under the repealed Social Service Tax Act.
Should this amendment to the Provincial Sales Tax Act be approved by the Legislative Assembly and proclaimed in force retroactive to April 1, 2013, an operator of an MJV who has paid the MJV exit tax in circumstances other than when the vehicle is licensed for use solely within B.C. will be entitled to a refund of the MJV exit tax paid.
In the interim, until such amendments can be introduced in the Legislative Assembly, the Ministry of Finance has directed the Insurance Corporation of British Columbia to only collect the MJV exit tax when an MJV is licensed for use solely within B.C.
No. On July 1, 2010, administration of the parking tax was transferred to TransLink.
No. The PM&E exemption for manufacturing does not apply to LNG production. However, while liquefied natural gas processing does not qualify as manufacturing, there is a PM&E exemption for qualifying oil and gas producers. LNG producers may be eligible for the PST exemption for PM&E obtained for use in the extraction or processing of natural gas.
To qualify for this exemption, the machinery and equipment must be obtained by a qualifying oil and gas producer for use primarily and directly in the processing of natural gas at the qualifying part of a processing plant. The qualifying part of a processing plant ends at the point at which the natural gas being processed has become a marketable product. Natural gas becomes a marketable product when it is pipeline quality, meaning it meets the content specifications required by pipeline operators to enter transmission pipelines (e.g. high pressure intra and inter-provincial transmission pipelines transporting natural gas to distribution centres). Once the natural gas is a marketable product, any machinery and equipment used to process or further process that natural gas, including the equipment used to convert the gas into LNG, does not qualify for exemption.
Yes. If the LNG is being produced for the purpose of sale, including exported for sale, the natural gas purchased by the producer of the LNG would be exempt from PST. Natural gas used by the LNG producer as part of the production process will be subject to carbon tax and may be subject to either PST or motor fuel tax depending on how the natural gas is used.