Food and beverage service providers and retail liquor sellers

This page provides information to help food and beverage service providers (such as restaurant operators and caterers) and retail liquor sellers understand how PST applies to their businesses. 

On this page

• Registration
• Taxable sales and leases
• Non-taxable sales and services
• Bundled sales and leases
• Containers and packaging materials
• Purchases and leases for your business
• Real property and affixed machinery
• Accommodation
• Buying a business

Registration

If you sell taxable beverages, such as liquor or soda beverages, or you sell or lease other taxable goods in the ordinary course of your business, you must register to collect and remit PST. This includes restaurants, bars, pubs, other eating establishments, and licensed caterers. You must also register to collect PST if you operate a retail liquor business (e.g. a private liquor store). For more information, see Bulletin PST 001, Registering to Collect PST (PDF, 380KB).

If you operate a restaurant or other eating establishment, or you're a caterer, and you do not sell or lease taxable goods or sell taxable beverages (such as liquor or soda beverages), you're not required to register to collect and remit PST. However, all businesses must pay PST on goods and services acquired for business use unless a specific exemption applies (see Purchases and leases for your business).

Taxable sales and leases

Liquor

You charge 10% PST on sales of liquor, such as:

• Beer
• Ciders and coolers
• Mixed drinks
• Spirits and liqueurs
• Wine
• Any beverage with an alcohol content of greater than 1%

You also charge 10% PST on chill charges or other extra charges included in the selling price of liquor, except GST and bottle or can refundable deposits.

Calculating PST on liquor

The goods and services tax (GST) is not included in the price on which PST is calculated. On liquor sales, you calculate the amount of PST in one of the following three ways.

1. Tax-excluded pricing. If you sell liquor without PST or GST included in the price, you calculate the 10% PST on the pre-tax price.

2. GST-included pricing. If you sell liquor with GST included, but not PST, you can calculate the PST by using the factor of 9.52% on the GST-included price [(100 ÷ 105) × 10%]. This will result in a 10% PST charge on the liquor.

3. GST and PST-included pricing. If you sell liquor with GST and PST included in the price, you can calculate the PST by using the factor of 8.7% on the GST-included price [(100 ÷ 115) × 10%]. This will result in a 10% PST charge on the liquor.

Note: In all cases, you must show PST as a separate item on the receipt, bill or invoice you provide to your customers.

Corkage

Some restaurants allow customers to bring their own unopened bottle of commercially-made wine to consume during their meal, and charge opening or corkage fees. You do not charge PST on opening and corkage fees because these charges do not form part of the purchase price paid by the customer for the wine.

Soda beverages

PST applies to all retail sales of soda beverages at a rate of 7%.

Soda beverages are carbonated or effervescent beverages that have bubbles and fizz and contain any of the following:

• Sugar
• Natural occurring sweeteners
• Added natural sweeteners (such as honey, molasses, maple syrup, fruit juice, stevia etc.)
• Artificial sweeteners (such as aspartame, sucralose, saccharin etc.)

Carbonation or effervescence may be either naturally occurring in drinks (as in the case of fermented non-alcoholic beverages, such as kombucha) or injected after the beverage has been manufactured (e.g. with carbon dioxide or nitrogen). 

They do not include dealcoholized beers, sparkling wines or ciders that contain 1% or less alcohol by volume.

Soda beverages include:

• Soft drinks and soda pop
• Sparkling fruit juices
• Carbonated or nitrogenized energy drinks
• Kombucha
• Nitrogenized coffee (if sweetened)
• Sparkling, sweetened water

Soda beverages also include:

• Frozen, sweetened beverages, such as Slurpees or Frosters, that have been carbonated or have other gases added to them
• Sweetened effervescent beverages that have any of the following added to them:
  • Frozen desserts, such as ice cream (e.g. ice cream floats)
  • Fruit or fruit flavouring
  • Candy, chocolate or another type of confection

Soda fountain beverages

You charge 7% PST on all beverages dispensed by a soda fountain, soda gun or similar equipment, even if the beverage is not a soda beverage (e.g. juice).

Vending machine beverages

You must charge PST on all beverages dispensed by a vending machine or similar equipment, unless the machine does not dispense any soda beverages. This means that if the vending machine dispenses any soda beverages, you must charge PST on all beverages dispensed by the machine, even if the beverage is not a soda beverage (e.g. juice, coffee or water).

Soda beverages sold with food or other goods

If you sell food or other goods (such as a toy), with a soda beverage or with access to a beverage dispensed by a soda fountain, soda gun or similar equipment, you charge PST on the beverage as follows:

• If you offer the beverage for sale without the food or other good, you charge PST on the lesser of:
  • The ordinary purchase price of that beverage, and
  • The total purchase price of the other good and beverage together

OR

• If you offer the beverage for sale only with the food or other good, the lesser of:
  • 50% of the total purchase price of the food or other good and beverage together, and
  • $3

Other goods

You charge 7% PST on the sale or lease of miscellaneous goods, such as clothing, bottle openers and souvenirs (e.g. souvenir glasses or pens with your company name on them).

If you're a caterer, you may be leasing goods to your customer (and may be required to charge your customer 7% PST) if:

• Your contract with your customer specifies you're leasing the goods to your customer, or
• You charge an additional amount to your customer for the goods (e.g. on the invoice, you separate the charge for your service from the charge for the goods), or the total price of the package varies based on the goods selected by your customer

For more information about how PST applies to caterers, see catering services.

Kegs leased with the sale of liquor

When you lease a keg with the sale of liquor for a single price, the general rule is that you charge 10% PST on the fair market value of the liquor and 7% PST on the fair market value for the lease of the keg. If there is a bundle discount, the single price must be reasonably attributed between the rental and the liquor to determine the amounts on which the applicable PST rates apply.

However, if you only charge a refundable deposit for the use of the keg, you charge PST only on the price for the liquor.

Non-taxable sales and services

Food sales

Sales of food for human consumption are exempt from PST, including:

• Meals
• Non-alcoholic hot or cold beverages (e.g. coffee or iced tea), except the soda beverages referred to above 
• Snack foods (chips, nuts, candy)

Mandatory gratuities

A mandatory gratuity is a tip that is added automatically to a customer’s restaurant bill. Generally, a mandatory gratuity is calculated by multiplying a certain percentage (e.g. 15%) by the total pre-tax amount of all food and drinks the customer purchased from the restaurant, including liquor or other taxable beverages.

You do not charge PST on mandatory gratuities because they do not form part of the purchase price paid by the customer. This applies even if the gratuity was calculated on a bill for taxable beverage purchases only.

Catering services

Catering services (e.g. menu planning, preparing, plating and serving food) are not subject to PST. If you only provide catering services and exempt food, and you do not sell or lease taxable goods to your customer, you do not charge your customer PST. 

However, if you provide goods to your customer either as part of your contract for services or separately from services, and your customer is allowed to keep the goods after the event, you must charge your customer PST on those goods.

Examples of goods you may allow your customer to keep include:

• Cake figurines and cake stands
• Candles and candle holders
• Decorations, such as vases, centrepieces
• Place card holders

If you provide goods to your customer that your customer is not allowed to keep after the catered event, you're not selling those goods to your customer. Instead, you're either:

• Using those goods to provide your service (e.g. disposable cutlery that is used up during the event and does not retain any value after the event, or goods such as linen and tables you lease from a third party) and you pay PST when you purchase or lease those goods, or
• Leasing or renting those goods (such as chairs, linens, reusable napkins, cutlery, dishware and tables) to your customer 

Generally, if you provide catering services for an all-inclusive price or as part of a package, you are using the goods in performing those services for your customer, so you must pay PST when you purchase or lease these goods from your supplier. You do not charge your customer PST.

Event planning services

You do not charge PST on event planning services (e.g. planning, designing, consulting, managing and organizing). For more information, see our Conferences, trade shows and other events page.

Prepaid purchase cards

A prepaid purchase card is a card, written certificate, or other voucher that is redeemable for a future purchase or lease of goods, software or services. Prepaid purchase cards include gift cards and gift certificates.

You do not charge your customer PST when they purchase a prepaid purchase card because they're purchasing store credit that they may redeem later. When your customer redeems the credit, PST applies to the purchase as if the credit were cash. PST will only apply if the item purchased is subject to PST.

Bundled sales and leases

If you sell taxable and non-taxable goods or services together for a single price, you're making a bundled sale or lease. The general rule for charging PST on a bundled sale or lease is you charge PST only on the fair market value of the taxable portion, unless a specific exemption applies. The fair market value is the retail price a good, software or service would normally sell for on the open market by a willing seller to a willing purchaser at arms length.

If you sell a meal package that includes a soda beverage, see soda beverages sold with food or other goods. 

If you sell a meal package that includes a glass of wine, you charge 10% PST on the fair market value of the glass of wine.

For more information, see Bulletin PST 316, Bundled Sales and Leases (PDF, 410KB).

Containers and packaging materials

In this section, obtain means:

• Purchase in B.C.
• Bring or send into B.C.
• Receive in B.C.

Exemptions for business

You are exempt from PST on containers and packaging materials (except reusable containers) you obtain solely for packaging the food and drink you sell. This includes bags for liquor purchases or takeout containers and lids.

The exemption applies whether or not you charge separately for the containers and packaging materials. To receive the exemption, you must provide your PST number to your supplier or, if you're not registered to collect PST, a Certificate of Exemption – General (FIN 490) (PDF, 200KB).

If you make your own containers and packaging materials solely for use in packaging or delivering the food or drink you sell, you may purchase the materials exempt from PST.

Labels

You're exempt from PST on labels you obtain solely for attaching to the goods you sell or lease if they remain with the goods after the sale or lease.

If you remove the labels from the goods at or before the time of sale or lease, you must pay PST on the labels.

Charges to customers

If you separately charge your customer for the containers and packaging materials, you must also charge PST. In this case, you're charging for the purchase of taxable containers and packaging materials. For example, if you sell pizzas or cakes and separately charge your customers $2 for the pizza or cake box, you must charge $0.14 in PST on the purchase price of the box.

If you do not separately charge your customers for containers and packaging materials you use to package exempt food or exempt beverages you sell, you do not charge your customers PST. In this case, the containers and packaging materials are part of the exempt food or exempt beverage sale. For example, if you sell pizzas or cakes in a box and only charge for the pizza or cake, you do not charge any PST because pizza and cake are exempt foods for human consumption. 

Similarly, if you do not separately charge your customer for containers and packaging materials, and you provide them with goods that are subject to PST, such as liquor or soda beverages, you simply charge PST on the full purchase price of the goods.

For more information, see Bulletin PST 305, Containers and Packaging Materials (PDF, 340KB).

Reusable containers

A reusable container is a container that's used to package or deliver goods and is capable of being returned and reused. If you obtain reusable containers, you must pay PST on their purchase price. This applies when you intend to sell your goods packaged or delivered in the reusable container. This includes returnable alcoholic beverage containers and products subject to container recycling fees in B.C. 

Refundable deposits 

You do not charge PST on refundable deposits your customers pay at the time of sale (e.g. for canned and bottled liquor or soda beverages).

Container recycling fees

A container recycling fee is a fee charged to cover the cost of recycling a beverage container in B.C., including aluminum, glass and plastic containers. If the goods you're selling are subject to PST (e.g. liquor and soda beverages) and a container recycling fee, you must charge PST on the container recycling fee paid by your customer on a retail sale because the fee forms part of the purchase price paid to receive the goods. The PST rate you charge on the fee is the same as for the goods being purchased; therefore, if the goods are liquor, the PST rate is 10% and if the goods are soda beverages, the PST rate is 7%.

For more information on container recycling fees, visit the Encorp website.

Purchases and leases for your business

Taxable goods

You must pay PST on the purchase or lease of new or used taxable goods you use in your business, such as:

• Advertising materials, such as flyers and brochures
• Cleaning supplies, such as rags, soaps and cleaning solutions
• Computer hardware including point-of-sale systems and other electronic devices
• Dishes, cutlery, knives, coasters, pots and pans
• Energy for heat and light (except electricity)
• Freestanding equipment, such as coolers, ice machines, juice dispensers and refrigerators
• Menus, linen (e.g. napkins and placemats)
• Paper towels and toilet paper
• Promotional materials you purchase to give away (see Promotional materials below)
• Reusable glasses and cups that are not for sale
• Shelving and display equipment
• Stationery, furniture and office equipment
• Supplies, such as pan liners, parchment paper, tray covers and doilies

You must also pay PST on the following:

• Software, unless a specific exemption applies (e.g. custom software). For more information, see our Software page
• Related services you purchase for your own equipment, such as knife sharpening, and repair or maintenance services provided to your cash registers. For more information, see Bulletin PST 301, Related Services (PDF, 400KB)

If your supplier does not charge you PST on taxable items, you must self-assess (pay directly to us) the PST due on your next PST return. If you do not have a PST number, you must self assess the PST due using a Casual Remittance Return (FIN 405) (PDF, 260KB) on or before the last day of the month following the month you obtained the taxable items. For example, if you purchase a taxable item in July, you must file the return and pay the PST no later than August 31.

Goods brought into B.C.

You must pay PST if you purchase or lease taxable goods outside B.C. and bring or send them into B.C. or receive them in B.C. You must pay PST on the total amount you pay to bring the goods into B.C., including charges for transportation, customs, excise, and any other costs, except the goods and services tax (GST).

If your supplier does not charge you PST at the time of the sale or lease, you must self‑assess the PST due on your next PST return. If you do not have a PST number, you must self‑assess the PST due using the Casual Remittance Return (FIN 405) (PDF, 260KB) on or before the last day of the month following the month you brought or sent the goods into B.C. or received the goods in B.C.

For more information, see Bulletin PST 310, Goods Brought Into B.C.(PDF, 320KB).

Promotional Materials

Promotional materials are taxable goods, software or telecommunication services you use, give away or sell below cost to help advertise or promote your business. Examples of promotional material include samples, gifts, premiums and prizes, and goods given away as part of a loyalty or rewards points program.

You must pay PST on all taxable goods you purchase or make as promotional materials. For example, you must pay PST if you buy mugs or balloons you will give away to promote your business.

Promotional material on which you must pay PST also includes taxable goods you obtain to sell at a price below cost. For example, you purchase a case of wine at a cost of $40 per bottle. To promote greater sales, you offer the wine to preferred customers at a below cost price of $30 per bottle. Your customer pays PST on the $30 purchase price of the wine. In addition, if you have not yet paid PST on the goods (e.g. after taking them out of your exempt resale inventory for use as promotional materials), you must self-assess PST on your next PST return, based on the following formula:

(Cost − Customer’s purchase price) × PST rate = PST to self-assess

($40 − $30) × 10% = $1.00 PST to self-assess

Note: You do not need to self-assess PST on goods you sell below cost if you’re not doing so for promotional purposes. For example, you purchased t‑shirts at $10 per item and attempted to sell them for $20 per item. After some time, you decide to mark down the remaining items to $5 per item before they became obsolete or because their value has decreased. Your customer pays PST on the $5 purchase price of the t-shirt but you do not self-assess any additional PST.

For more information, see Bulletin PST 311, Promotional Materials and Special Offers (PDF, 360KB).

Exempt goods

Food service supplies

If you're a restaurant operator, caterer or other business in the food service industry, you're exempt from PST when you obtain supplies to provide to your customer as part of their purchase of food. The exemption does not apply to supplies your customer uses and returns to you, such as porcelain dinnerware and metal cutlery (see Taxable goods above).

Exempt supplies include items such as:

• Coffee cup carry trays
• Disposable cutlery (e.g. wooden or plastic)
• Disposable plates and bowls
• Napkins, straws, stir sticks and disposable skewers
• Paper and plastic bags
• Toothpicks, cocktail picks, cocktail serviettes

The exemption applies whether or not you separately charge your customer for the supplies because you're obtaining the supplies for resale. To purchase these goods exempt from PST, give the supplier your PST number or, if you do not have a PST number, a completed Certificate of Exemption – General (FIN 490) (PDF, 200KB).

Goods for resale or lease

You’re exempt from PST on goods or services you obtain solely for resale or lease to your customers. You’re also exempt from PST on goods you obtain solely for processing, fabricating, manufacturing, attaching, or incorporating into other goods for resale or lease (e.g. liquor used in cooking or incorporated into food for resale).

To purchase these goods (except liquor) exempt from PST, give the supplier your PST number or, if you do not have a PST number, a completed Certificate of Exemption – General (FIN 490) (PDF, 200KB).

To purchase liquor exempt from PST, give the supplier your PST number or, if you have applied for but not yet received your PST number, a completed Certificate of Exemption – General (FIN 490) (PDF, 200KB).

If you make a purchase or lease that includes both exempt goods or services for resale and taxable goods or services you will use in your business, tell your supplier which goods or services are exempt and which are taxable. If they do not charge you PST on the taxable goods or services, you must self-assess (pay directly to us) the PST due.

For more information, see Bulletin PST 208, Goods for Resale (PDF, 320KB).

Change in use

If you take taxable goods from your resale inventory for business or personal use, you must self-assess the PST due on your cost of the goods.

If you have a PST number, you must self-assess the PST due on your next PST return. If you do not have a PST number, you must self-assess the PST due using the Casual Remittance Return (FIN 405) (PDF, 260KB) on or before the last day of the month following the month you used the goods for a taxable purpose.

If you take taxable goods from your lease inventory for business or personal use, you must self‑assess PST as explained in Bulletin PST 315, Rentals and Leases of Goods (PDF, 490KB).

Safety equipment and protective clothing

The following safety equipment and protective clothing are exempt from PST:

• Work-related safety equipment and protective clothing designed to be worn by, or attached to, a worker if required under specified provincial work safety legislation when purchased or leased by an employer, self-employed person or educational institution
• Specifically listed work-related safety equipment and protective clothing designed to be worn by a worker
• Specifically listed general safety equipment and protective clothing, including first aid kits and portable fire extinguishers

For more information, see Bulletin PST 100, Safety Equipment and Protective Clothing (PDF, 340KB).

Real property and affixed machinery

Real property is land and anything that's attached to the land so it becomes part of real property after installation (that is, it ceases to be personal property at common law). This would normally include buildings, structures, and things such as machinery or equipment, that are attached to the land (or to buildings or structures) by some means other than their own weight. 

If you enter into a contract under which a contractor will supply and affix, or install, goods to real property, your contractor must pay PST on the goods they use to fulfil the contract, unless a specific exemption applies. In this case, as the customer of the contractor, you do not pay PST on the contract.

For more information, see our PST for real property contractors page. 

For the purpose of the PST, goods that can become part of real property can be classified into two types:

• Improvements to real property, or
• Affixed machinery

If you purchase or lease real property in which affixed machinery is already installed, you're purchasing or leasing goods (the affixed machinery) and must pay PST on the purchase price or lease price of that affixed machinery, unless a specific exemption applies.

For more information, see our PST for real property contractors page.

Taxable goods and real property

If you lease taxable goods and real property together for a single price, generally, you must pay PST on the fair market value of the lease for the taxable goods.

For example, you lease taxable restaurant equipment together with a non-taxable commercial lease of real property. You must pay PST on the fair market value of the lease for the taxable restaurant equipment.

Accommodation

If you provide short-term accommodation in B.C., PST of 8% applies to the sale, unless a specific exemption applies. In addition to the PST, the up to 3% municipal and regional district tax (MRDT) applies if you're in a participating area of B.C.

If the accommodation is provided within the City of Vancouver, you must also collect an additional Major Events MRDT. The additional Major Events MRDT is in effect from February 1, 2023 to January 31, 2030, and applies in the same manner as the MRDT. 

For more information, see our Accommodation page.

Buying a business

If you're buying a business, you should get a clearance certificate from us. The certificate confirms that the current business owner has paid and remitted all outstanding PST and any related penalties and interest (up to the date the certificate was issued).

For more information, see our Buying and selling a business page.