Provincial Sales Tax Act, Part 5 - Taxes in Relation to Services

Last updated on November 1, 2023

Division 1 — Services Related to Purchase

Section 115 – Definition

PST - SEC.115/Int.

References:

Act: Section 1 "associated corporation", "related individual"; Part 5 – Division 1

Interpretation (Issued: 2013/11)

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 provides under section 115 that in Division 1 [Services Related to Purchase] of Part 5 [Taxes in Relation to Services], "associate" includes an agent, partner, joint venturer, related individual and associated corporation.

Section 116 – Tax If Contract For Property Conversion Related To Purchase

PST - SEC.116/Int.

References:

Act: Section 1 "taxable service"; Section 28; Section 117; Section 117.1; Section 118; Section 118.1

PSTERR: Section 71; Section 72.1

Interpretation (Issued: 2013/11)

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 as amended by Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 provides under section 116 the taxing provision that applies where a person, within 180 days before or after acquiring tangible personal property, enters into a contract under which the original tangible personal property is processed, fabricated or manufactured into, or attached to or incorporated into other tangible personal property.

Subsection 116(1) provides that in section 116, "contract amount" means an amount payable under the contract referred to in paragraph 116(2)(b) for or in relation to the resulting tangible personal property.

Subsection 116(2) provides that section 116 applies to a purchaser who:

(a) acquires tangible personal property

(i) from another person, or

(ii) through another person acting as agent of the purchaser, and

(b) within 180 days before or after acquiring the tangible personal property, enters into a contract with the other person or an associate of the person under which the original tangible personal property referred to in paragraph 116(2)(a) is processed, fabricated or manufactured into, or attached to or incorporated into other tangible personal property by that other person or associate.

Under PSTERR section 71 [motor vehicle conversion for individuals with disabilities], a purchaser to whom section 116 applies is exempt from tax imposed under section 116 if the processing, fabrication, manufacturing, attachment or incorporation referred to in paragraph 116(2)(b) is solely for the purpose of

(a) modifying a motor vehicle, other than a multijurisdictional vehicle, to facilitate the use of the vehicle by, or the transportation of, an individual using a wheelchair, or

(b) equipping a motor vehicle, other than a multijurisdictional vehicle, with an auxiliary driving control to facilitate the operation of the vehicle by an individual with a disability.

Subsection 116(3) provides that a purchaser to whom section 116 applies must pay to the government tax at the rate of 7% of the contract amount.

Subsection 116(4) provides that tax payable under subsection 116(3) is in addition to tax payable on the original tangible personal property.

Subsection 116(5) is repealed.

Subsection 116(6) provides that tax is not payable under section 116 on that portion of the contract amount on which tax is otherwise payable by the purchaser under the Act.

Section 28 [when tax is payable in respect of a purchase or lease] provides for when tax is payable under section 116.

Section 117 – Tax if Contract for Modification of Purchased Property

PST - SEC.117/Int.-R.1

References:

Act: Section 1 "modified business vehicle", "original purchase price", "passenger vehicle", "purchase price", "taxable service"; Section 28; Section 117.1; Section 118; Section 192

PSTERR: Section 72; Section 72.1

Interpretation (Issued: 2013/11; Revised 2021/11)

Effective April 1, 2018, Bill 2, Budget Measures Implementation Act, 2018 amended section 117 to provide for additional PST rates on contracts to modify passenger vehicles if the tax rate value of the vehicle is $125,000 or more. For a tax rate value of $125,000 - $149,999.99 the rate increased to 15%, and to 20% for those with a tax rate value of $150,000 and over.

For contracts that the new PST rates apply to, the PST amount may be included in the consideration for purposes of calculating the GST. For additional information relating to GST, contact the Canada Revenue Agency.

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 as amended by Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 provides under section 117 that tax applies where a person either acquires TPP as part of an agreement to have the TPP processed or modified by the seller, or, within 2 days of acquiring the TPP, enters into a separate contract with the seller of the TPP to modify or process the property.

Subsection 117(1) provides that in section 117,

"contract amount" means an amount payable under the contract referred to in subsection 117(2) for or in relation to the modification or processing referred to in paragraph 117(2)(b);

"tax rate value",

(a) in relation to a passenger vehicle other than a modified business vehicle, means the total of the original purchase price of the passenger vehicle and the contract amount, and

(b) in relation to a modified business vehicle, means the total of the original purchase price of the modified business vehicle and the contract amount less the portion of that amount that can reasonably be attributed to the modifications referred to in paragraph (b) of the definition of "modified business vehicle".

Subsection 117(2) provides that section 117 applies to a purchaser of tangible personal property if the purchaser enters into an agreement, with the seller of the property or an associate of the seller,

(a) that is:

(i) part of the contract to acquire the tangible personal property, or

(ii) a separate contract entered into within 2 days before or after entering into the contract to acquire the tangible personal property, and

(b) under which the seller or an associate of the seller is to modify or process the tangible personal property.

Under PSTERR section 72 [motor vehicle modification for individuals with disabilities], a purchaser to whom section 117 applies is exempt from tax imposed under section 117 if the modification or processing of the tangible personal property referred to in paragraph 117(2)(b) is solely for the purpose of

(a) modifying a motor vehicle, other than a multijurisdictional vehicle, to facilitate the use of the vehicle by, or the transportation of, an individual using a wheelchair, or

(b) equipping a motor vehicle, other than a multijurisdictional vehicle, with an auxiliary driving control to facilitate the operation of the vehicle by an individual with a disability.

Subsection 117(3) provides that a purchaser to whom section 117 applies must pay to the government tax calculated as follows:

(a) if the tangible personal property referred to in subsection 117(2) is not a passenger vehicle, at the rate of 7% of the contract amount;

(b) if the tangible personal property referred to in subsection 117(2) is a passenger vehicle, at the applicable rate as follows:

(i) 7% of the contract amount, if the tax rate value is less than $55,000;

(ii) 8% of the contract amount, if the tax rate value is $55,000 to $55,999.99;

(iii) 9% of the contract amount, if the tax rate value is $56,000 to $56,999.99;

(iv) 10% of the contract amount, if the tax rate value is $57,000 or more.

Subsection 117(4) provides that tax is not payable under section 117 on that portion of the contract amount on which tax is otherwise payable by the purchaser under the Act.

Section 28 [when tax is payable in respect of a purchase or lease] provides for when tax is payable under section 117.

R.1 Charges for Alterations of Garments by Clothing Retailers (Issued: 2014/04)

Related services to customer-owned clothing, including repairs, alterations and embroidery, are exempt from PST under PSTERR paragraph 73(1)(h) [tangible personal property for which service is exempt - general].

However, where a clothing retailer charges customers to modify or alter garments (e.g., hemming suit pants) as part of the sales contract to purchase a garment, PST applies to the costs of those modifications. This applies even if a separate contract is entered into two days before or after the sale of the garment to provide for its modification/alteration. It does not matter whether the modifications/alterations are completed by the seller or an associate of the seller (e.g., a third party tailor).

Section 117.1 – Tax If Resulting Property Used For New Purpose

PST - SEC.117.1/Int.

References:

Act: Section 1 "registrant"; Section 116; Section 117; Section 118; Section 192

PSTR: Section 62; Section 79

Interpretation (Issued: 2013/11)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 added section 117.1.

Section 117.1 provides the change of use taxing provision that applies where a change of use of tangible personal property that was exempt under section 118 [exempt property] from section 116 [tax if contract for property conversion related to purchase] or section 117 [tax if contract for modification of purchased property] occurs.

Subsection 117.1(1) provides that in section 117.1, "resulting tangible personal property" means tangible personal property in its resulting form after completion of a contract referred to in section 116 or section 117.

Subsection 117.1(2) provides that if a person

(a) was exempt, under section 118, from tax imposed under section 116 or section 117 because the resulting tangible personal property was to be used for a particular purpose, and

(b) subsequently uses that resulting tangible personal property, or allows that resulting tangible personal property to be used, for a purpose other than

(i) the particular purpose, or

(ii) another purpose for which that resulting tangible personal property would be exempt from tax under section 116 or 117 if that property were to be used for that purpose,

the person must pay to the government tax in an amount equal to the amount of tax that would, but for section 118, have been payable under section 116 or 117.

Subsection 117.1(3) provides that tax payable under subsection 117.1(2) must be paid on or before the last day of the month after the month in which the person first uses the resulting tangible personal property, or allows the resulting tangible personal property to be used, as referred to in paragraph 117.1(2)(b).

Subsection 117.1(4) provides that despite subsection 117.1(3), tax payable under subsection 117.1(2) by a registrant must be paid

on or before the prescribed date (as provided under PSTR section 62 [section 117.1 of Act – tax if resulting property used for new purpose]; see PSTR/Sec. 62/Int.), and
in the prescribed manner (as provided under PSTR subsection 79(2) [manner for payment of tax]; see PSTR/Sec.79/Int.).

Section 118 – Exempt Property

PST - SEC.118/Int.

References:

Act: Section 116; Section 117; Section 117.1

Interpretation (Issued: 2013/11)

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 provides under section 118 that a purchaser is exempt from tax imposed under section 116 [tax if contract for property conversion related to purchase] or section 117 [tax if contract for modification of purchased property] if the tangible personal property in its resulting form after completion of the contract referred to in the applicable section would be exempt from tax imposed under Part 3 [Taxes in Relation to Tangible Personal Property].

Section 118.1 – Refund If Contract For Property Conversion Not Related To Purchase

PST - SEC.118.1/Int.

References:

Act: Section 116

Interpretation (Issued: 2013/11)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 added section 118.1.

Section 118.1 provides the refund provision that applies if the director is satisfied that a purchaser paid tax under subsection 116(3) [tax if contract for property conversion related to purchase] and that, at the time the tangible personal property referred to in paragraph 116 (2)(a) was acquired, the purchaser did not intend to enter into the contract referred to in paragraph 116(2)(b). If this is the case, the director must refund to the purchaser the amount of tax paid under subsection 116(3) in respect of that contract.

Division 2 — Related Services in Relation to Tangible Personal Property

Section 119 – Tax On Purchase Of Related Service Provided In British Columbia

PST - SEC.119/Int.

References:

Act: Section 1 "collector", "purchaser", "related service", "registration number"; Section 28; Section 121; Section 147; Section 153; Section 203

PSTR: Section 86; Section 88

Bulletin PST 301

Interpretation (Issued: 2013/12)

Subsection 119(1) provides that a purchaser of a related service provided or to be provided in British Columbia must pay to the government tax at the rate of 7% of the purchase price of the related service.

Subsection 119(2) provides that if a collector sells a related service provided or to be provided in British Columbia to a person who alleges that the person is exempt under subsection 121(2) [exemptions from tax under this Division] or under prescribed provisions of the regulations from paying the tax under subsection 119(1), the collector must nevertheless levy and collect the tax under subsection 119(1) unless the collector obtains from that person, at or before the time the tax is payable,

(a) a declaration in a form acceptable to the director, if required by the regulations,

(b) any information or document required by the regulations, and

(c) any information or document required by the director (e.g., a registration number, prorate number, BC Farmer Identity Card, Certificate of Exemption – Farmer (form FIN 458), Certificate of Exemption – Fisher (form FIN 455), Certificate of Exemption – Aquaculturist (form FIN 456), Certificate of Exemption – General (form FIN 490)) .

Section 28 [when tax is payable in respect of a purchase or lease] provides for when tax is payable under section 119.

Section 120 – Tax If Related Service Provided Outside British Columbia

PST - SEC.120/Int.

References:

Act: Section 1 "registrant", "related service"; Section 121; Section 192

PSTERR: Section 76.1

PSTR: Section 63; Section 79

Bulletin PST 301

Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 as amended by Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 provides under section 120 the taxing provision that applies where a person who resides, ordinarily resides or carries on business in British Columbia brings or sends into British Columbia, or receives delivery of in British Columbia, property that the person took or sent out of British Columbia primarily for the purpose of having a related service provided in respect of the property.

Subsection 120(1) provides that section 120 applies to a person who

(a) resides, ordinarily resides or carries on business in British Columbia,

(b) takes or sends tangible personal property out of British Columbia

(i) primarily for the purpose of having a related service provided in respect of the property, and

(ii) has the related service provided in respect of the property, and

(c) subsequently brings or sends into British Columbia, or receives delivery of in British Columbia, the tangible personal property referred to in paragraph 120(1)(b) for use or consumption

(i) by the person,

(ii) by another person at the first person’s expense,

(iii) by a principal for whom the first person acts as agent, or

(iv) by another person at the expense of a principal for who the first person acts as agent.

Subsection 120(2) provides that a person to whom section 120 applies must pay to the government tax in respect of the related services at a rate of 7% of the purchase price of that related service.

Subsection 120(3) provides that the tax payable under subsection 120(2) must be paid on or before the last day of month after the month in which the person subsequently brings or sends into British Columbia, or receives delivery of in British Columbia, the tangible personal property.

Subsection 120(4) provides that despite subsection 120(3), tax payable under subsection 120(2) by a registrant must be paid

on or before the prescribed date (as provided under PSTR section 63 [section 120 of Act – tax if related service provided outside British Columbia]; see PSTR/Sec. 63/Int.), and
in the prescribed manner (as provided under PSTR subsection 79(2) [manner for payment of tax]; see PSTR/Sec.79/Int.).

Section 120.1 – Tax If Change Of Use Of Related Service

PST - SEC.120.1/Int.

References:

Act: Section 1 "registrant", "related service", "use"; Section 192

PSTERR: Section 73; Section 74; Section 75; Section 76; Section 77; Section 113

PSTR: Section 64; Section 79

Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 added section 120.1.

Section 120.1 provides the change of use taxing provision that applies where a change in use of a related service occurs.

Subsection 120.1(1) provides that if a person

(a) purchased a related service that was exempt from tax under the Act because the related service was to be used for a particular purpose, and

(b) subsequently uses that related service, or allows that related service to be used, for a purpose other than

(i) the particular purpose, or

(ii) another purpose for which that related service would be exempt from tax under the Act if that related service were to be used for that purpose,

the person must pay to the government tax in at the rate of 7% of the purchase price of that related service.

Subsection 120.1(2) provides that tax payable under subsection 120.1(1) must be paid on or before the last day of the month after the month in which the person subsequently uses the related service, or allows the related service to be used, as referred to in paragraph 120.1(1)(b).

Subsection 120.1(3) provides that despite subsection 120.1(2), tax payable under subsection 120.1(1) by a registrant must be paid

on or before the prescribed date (as provided under PSTR section 64 [section 121 of Act – tax if change in use of related service]; see PSTR/Sec. 64/Int.), and
in the prescribed manner (as provided under PSTR subsection 79(2) [manner for payment of tax]; see PSTR/Sec.79/Int.).

Section 121 – Exemptions From Tax Under This Division

PST - SEC.121/Int.

References:

Act: Section 1 "related service", "small seller"; Section 119; Section 120; Part 5 – Division 2; Section 135

Bulletin PST 301

Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 as amended by Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 provides under section 121 the following exemptions from tax imposed under Division 2 [Related Services in Relation to Tangible Personal Property] of Part 5 [Taxes in Relation to Services]:

Subsection 121(1) provides that a person who takes or sends tangible personal property out of British Columbia, primarily for the purpose of using the tangible personal property outside British Columbia for a period of time, is exempt from tax under section 120 [tax if related service provided outside British Columbia] in respect of any related service provided in respect of that tangible personal property while it is outside British Columbia during that period.

Subsection 121(2) provides that subject to section 135 [exemptions not applicable to small seller], a purchaser who purchases a related service is exempt from tax imposed under Division 2 of Part 5 on the purchase if that purchase is made for the purpose only of selling the related service to other persons.

Additional exemptions from tax under Division 2 of Part 5 are provided under PSTERR Division 2 [Related Services in Relation to Tangible Personal Property] of Part 4 [Exemptions in Relation to Services] and PSTERR section 113 [services related to qualifying machinery and equipment].

Division 3 — Accommodation

Section 122 – Tax On Accommodation

PST - SEC.122/Int.

References:

Act: Section 1 "accommodation", "purchase price", "purchaser"; Section 28; Section 123.1

PST and MRDT Guide for Accommodation Providers

Interpretation (Issued: 2013/12)

Section 122 provides that a purchaser of accommodation in British Columbia must pay to the government tax at the rate of 8% of the purchase price of the accommodation.

Section 28 [when tax is payable in respect of a purchase or lease] provides for when tax is payable under section 122.

Exemptions from tax under Division 3 [Accommodation] of Part 5 [Taxes in Relation to Services] are provided under PSTERR Division 3 [Accommodation] of Part 4 [Exemptions in Relation to Services].

Section 123 – Tax On Accommodation In Designated Accommodation Area

PST - SEC.123/Int.

References:

Act: Section 1 "accommodation", "designated accommodation area", "designated recipient", "purchase price"; Section 28; Section 123.1; Section 123.2; Section 123.3; Section 124; Section 124.1; Section 125; Section 178; Section 185; Section 240

PSTR: Section 74; Section 76

Designated Accommodation Area Tax Regulation

Bulletin PST 120

Interpretation (Issued: 2013/12; ; Revised: 2016/01)

Effective March 25, 2015, Bill 10, Budget Measures Implementation Act, 2015 amended subsection 123(2) by changing the maximum tax rate that may be imposed from 2% to 3%. This does not change the actual rate of municipal and regional district tax (MRDT) charged in any designated accommodation area, only the maximum rate that may be charged if prescribed in the Designated Accommodation Area Tax Regulation.

The MRDT is levied in prescribed areas of British Columbia, as set out in the Designated Accommodation Area Tax Regulation. The funds generated from the MRDT must be used for prescribed purposes (generally for the development of tourism amenities in the areas where they are raised).

The MRDT is in addition to the 8% base tax on short-term accommodation purchased in British Columbia that is payable under section 122 [tax on accommodation].

Subsection 123(1) provides that if accommodation is purchased in a designated accommodation area, the purchaser must pay to the designated recipient, by paying to the government as agent of the designated recipient, tax at the prescribed rate on the purchase price of the accommodation.

For prescribed rates, see the Designated Accommodation Area Tax Regulation or the PST and MRDT Guide for Accommodation Providers.

Subsection 123(2) provides that the maximum rate of tax that may be imposed under section 123 is 2% of the purchase price of the accommodation.

Subsection 123(3) is repealed.

Section 28 [when tax is payable in respect of a purchase or lease] provides for when tax is payable under section 123.

Exemptions from tax under Division 3 [Accommodation] of Part 5 [Taxes in Relation to Services] are provided under PSTERR Division 3 [Accommodation] of Part 4 [Exemptions in Relation to Services].

Section 123.01 - Transition - Application of Section 123 if Chang in Designation Status of Tax Rate

PST - SEC.123.01/Int.

References:

Act: Section 1 "accommodation", "designated accommodation area"; Section 123

Bulletin PST 120

Interpretation (Issued: 2016/01)

Effective February 18, 2015, Bill 10, Budget Measures Implementation Act, 2015 added section 123.01 to provide transition rules for the application of the municipal and regional district tax (MRDT) under section 123 [tax on accommodation in designated accommodation area] when an area becomes a designated accommodation area, ceases to be a designated accommodation area or there is a change in the MRDT rate prescribed under the Designated Accommodation Area Tax Regulation for a designated accommodation area.

Section 123.1 – Obligation To Pay And Collect Tax On Accommodation Purchased For Resale

PST - SEC.123.1/Int.

References:

Act: Section 1 "accommodation", "collector", "designated accommodation area", "registration number"; Section 122; Section 123; Section 147; Section 153; Section 203

PSTR: Section 86; Section 88

Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 added section 123.1.

Section 123.1 provides that if a collector sells accommodation at a sale in British Columbia to a person who alleges that the accommodation is being purchased for resale, the person must nevertheless pay tax under section 122 [tax on accommodation] and section 123 [tax on accommodation in designated accommodation area] as if the person were a purchaser and the collector must nevertheless levy and collect the tax under section 122 and section 123 unless the collector obtains, at or before the time the tax is payable,

(a) that person's registration number, or

(b) if that person does not have a registration number, a declaration in a form acceptable to the director from that person (a Certificate of Exemption – General (form FIN 490).

Section 123.2 – Tax If Change In Use Of Accommodation Purchased For Resale

PST - SEC.123.2/Int.

References:

Act: Section 1 "accommodation", "designated accommodation area", "designated recipient", "registrant"; Section 124.1; Section 125; Section 192; Section 240

PSTR: Section 65; Section 79

Designated Accommodation Area Tax Regulation

PST and MRDT Guide for Accommodation Providers

Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 added section 123.2.

Section 123.2 provides the change of use taxing provision that applies where a change of use of accommodation purchased for resale occurs.

Subsection 123.2(1) provides that if a person purchased accommodation in British Columbia for resale and becomes, for any period, a user of that accommodation, the person must pay to the government tax at the rate of 8% of the purchase price of the accommodation.

Subsection 123.2(2) provides that, subject to subsection 123.2(4), subsection 123.2(3) applies to a person in respect of accommodation if

(a) the person purchased accommodation in British Columbia for resale,

(b) the person becomes, for any period, a user of that accommodation, and

(c) at the time the person becomes a user of that accommodation, the accommodation is in a designated accommodation area.

Subsection 123.2(3) provides that a person to whom this subsection applies must pay to the designated recipient, by paying to the government as agent of the designated recipient, the up to 2% municipal and regional district (MRDT) tax on the purchase price of the accommodation at the rate prescribed for the purposes of section 123(1) for accommodation purchased in the designated accommodation area.

Subsection 123.2(4) provides that subsections 123.2(1) and 123.2(3) do not apply to a person if, when the person becomes a user of the accommodation, the accommodation is used for a purpose for which the accommodation would have been exempt from tax under the Act if the accommodation were to be used for that purpose when the person purchased that accommodation.

Subsection 123.2(5) provides that tax payable under subsection 123.2(1) or 123.2(3) must be paid on or before the last day of the month after the month in which the person first becomes a user of the accommodation.

Despite subsection 123.2(5), subsection 123.2(6) provides that tax payable under subsection 123.2(1) or 123.2(3) by a registrant must be paid

on or before the prescribed date (as provided under PSTR section 65 [section 123.2 of Act – tax if change in use of accommodation purchased for resale]; see PSTR/Sec. 65/Int.), and
in the prescribed manner (as provided under PSTR subsection 79(2) [manner for payment of tax]; see PSTR/Sec.79/Int.).

Section 123.3 – Tax If Accommodation Used For New Purpose

PST - SEC.123.3/Int.

References:

Act: Section 1 "accommodation", "designated accommodation area", "designated recipient", "registrant"; Section 124.1; Section 125; Section 192; Section 240

PSTR: Section 66; Section 79

Designated Accommodation Area Tax Regulation

Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 added section 123.3.

Section 123.3 provides the change of use taxing provision that applies where a change of use of accommodation occurs.

Subsection 123.3(1) provides that if a person

(a) purchased accommodation in British Columbia was exempt from tax under the Act because the accommodation was to be used for a particular purpose, and

(b) subsequently uses that accommodation, or allows that accommodation to be used, for a purpose other than

(i) the particular purpose, or

(ii) another purpose for which that accommodation would be exempt from tax under the Act if that accommodation were to be used for that purpose,

the person must pay to the government tax at the rate of 8% of the purchase price of the accommodation.

Subsection 123.3(2) provides that subsection 123.3(3) applies to a person in respect of accommodation if

(a) the person purchased accommodation in British Columbia that was exempt from tax under the Act because the accommodation was to be used for a particular purpose, and

(b) the person subsequently uses that accommodation, or allows that accommodation to be used, for a purpose other than

(i) the particular purpose, or

(ii) another purpose for which that accommodation would be exempt from tax under the Act if that accommodation were to be used for that purpose, and

(c) at the time the person uses that accommodation, or allows that accommodation to be used, as referred to in paragraph 123.3(2)(b), the accommodation is in a designated accommodation area.

Subsection 123.3(3) provides that a person to whom subsection 123.3(3) applies must pay to the designated recipient, by paying to the government as agent of the designated recipient, the up to 2% municipal and regional district (MRDT) tax on the purchase price of the accommodation at the rate prescribed for the purposes of subsection 123(1) for accommodation purchased in the designated accommodation area.

Subsection 123.3(4) provides that tax payable under subsections 123.3(1) or 123.3(3) must be paid on or before the last day of the month after the month in which the person first uses the accommodation, or allows the accommodation to be used, as referred to in paragraph 123.3(1)(b) or 123.3(2)(b).

Subsection 123.3(5) provides that despite subsection 123.3(4), tax payable under subsection 123.3(1) or 123.3(3) by a registrant must be paid

on or before the prescribed date (as provided under PSTR section 66 [section 123.3 of Act – tax if accommodation used for new purpose]; see PSTR/Sec. 66/Int.), and
in the prescribed manner (as provided under PSTR subsection 79(2) [manner for payment of tax]; see PSTR/Sec.79/Int.)

Section 124 – Refund In Relation To New Designated Accommodation Area

PST - SEC.124/Int.

References:

Act: Section 1 "accommodation", "designated accommodation area", "director"; Section 123

Bulletin PST 120

Interpretation (Issued: 2013/12; Revised: 2016/01)

Effective April 1, 2013, Bill 10, Budget Measures Implementation Act, 2015 amended section 124 by replacing "in a designated accommodation area with "in an area that is or has become a designated accommodation area". The intent of the amendment was to clarify that refunds may be provided even though the area was not a designated accommodation area at the time the purchaser purchased accommodation.

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 provides under section 124 the refund provision that requires the director to provide a refund in the following circumstance:

Subsection 124(1) provides that if the director is satisfied that

(a) a purchaser purchased accommodation in a designated accommodation area,

(b) in relation to the purchase, the purchaser

(i) received a written confirmation of reservation,

(ii) entered into a written contract, or

(iii) made a deposit of money,

(c) the purchase is for a specified number of days of accommodation that are set out in the confirmation or contract or covered by the deposit, and

(d) the confirmation, contract or deposit was received, entered into or made before the area became a designated accommodation area,

the director must refund to the purchaser the up to 2% municipal and regional district (MRDT) tax paid under section 123 [tax on accommodation in designated accommodation area] in accordance with subsection 124(2).

Subsection 124(2) provides that the amount of the refund under subsection 124(1) is equal to the amount of tax paid under section 123 on the purchase price of the accommodation for each of the specified number of days.

Section 124.01 - Refund in Relation to Increase in Tax Rate

PST - SEC.124.01/Int.

References:

Act: Section 1 "accommodation", "designated accommodation area", "director"; Section 123

Bulletin PST 120

Interpretation (Issued: 2015/10)

Effective March 25, 2015, Bill 10, Budget Measures Implementation Act, 2015 added section 124.01 as a consequence of the change to the maximum rate of the municipal and regional district tax (MRDT) under section 123 [tax on accommodation in designated accommodation area]. Section 124.01 mirrors section 124 [refund in relation to new designated accommodation area], providing the circumstances where a purchaser of accommodation is eligible for a refund of the difference between the new MRDT rate and the old MRDT rate when the prescribed rate for a designated accommodation area is increased.

Section 124.1 – Payment Into Consolidated Revenue Fund

PST - SEC.124.1/Int.

References:

Act: Section 123; Section 123.2; Section 123.3

Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 added section 124.1.

Section 124.1 provides that despite the Financial Administration Act, any tax paid under subsection 123(1) [tax on accommodation in designated accommodation area], 123.2(3) [tax if change in use of accommodation purchased for resale] or 123.3(3) [tax if accommodation used for new purpose] and received by the government must be paid into the consolidated revenue fund.

Section 125 – Payment To Designated Recipient

PST - SEC.125/Int.

References:

Act: Section 1 "accommodation", "collector", "designated accommodation area", "designated recipient", "director", "purchaser"; Section 123; Section 123.2; Section 123.3; Section 203; Section 240

Designated Accommodation Area Tax Regulation

Interpretation (Issued: 2013/12; Revised: 2023/10)

Effective April 11, 2019, Bill 5, Budget Measures Implementation Act, 2019 amends PSTA section 125 to clarify the ownership of revenues when the designated recipient is a society that is dissolving or liquidating. The amendments also provide a clear authority to transfer revenues to a new designated recipient.

Subsections 125(6) and (7) require that a designated recipient must notify the director before pursuing any dissolution or liquidation under the Societies Act. Subsection 125(8) allows the director to withhold payments if the director has reason to believe the designated recipient intends to dissolve or liquidate, or that it has not complied with Societies Act obligations, which would trigger an involuntary dissolution.

Subsection 125(9) allows a designated recipient to transfer unspent MRDT revenue to government before dissolving or liquidating. Per subsection 125(10), that revenue must be paid into the consolidated revenue fund.

If a new designated recipient is prescribed for the designated accommodation area within two years of the previous recipient’s dissolution or liquidation, subsection 125(11) requires the director to pay MRDT revenues transferred to or withheld by government to the new designated recipient. If there is no new designated recipient within two years, subsection 125(12) provides that the ownership of the revenues transfers to government.

Subsection 125(13) clarifies that any payments transferred to or withheld by government are not the property of the designated recipient from which it was withheld or transferred.

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 as amended by Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 provides under section 125 that the director must pay from the consolidated revenue fund the up to 2% MRDT tax collected in a designated accommodation area to a designated recipient, less the costs of administering and enforcing the MRDT and any amounts of MRDT refunded by the director to a purchaser or collector.

Subsection 125(1) provides that the director must pay from the consolidated revenue fund to the designated recipient amounts equal to the total of

(a) all amounts of tax imposed under section 123 [tax on accommodation in designated accommodation area], section 123.2(3) [tax if change in use of accommodation purchased for resale] or section 123.3(3) [tax if accommodation used for new purpose] in the designated accommodation area that are remitted or paid to the government, and

(b) all amounts of penalties imposed under section 203 [failure to levy tax] that

(i) are in relation to tax under section 123 in respect of accommodation in the designated accommodation area that is not levied as required under the Act, and

(ii) are paid to the government,

less any amounts deducted under subsections 125(3) and 125(4).

Subsection 125(2) provides that in relation to any money paid under subsection 125(1) to a designated recipient, the designated recipient

(a) must not spend the money for a purpose other than a prescribed purpose (as provided by the regulation applicable for that designated accommodation area), and

(b) must account to the minister for its expenditure at the time and in the manner specified by the minster.

Subsection 125(3) provides that the director may deduct from a payment under subsection 125(1) to a designated recipient a fee to recover the additional costs to the government of administering and enforcing the tax imposed under section 123, subsections 123.2(3) and 123.3(3).

Subsection 125(4) provides that the director may deduct from a payment under subsection 125(1) to a designated recipient an amount equal to an amount of tax under section 123, subsections 123.2(3) and 123.3(3) that is paid or remitted to the government and is refunded by the director to a purchaser or collector.

Subsection 125(5) provides that section 27(1)(a) [regulation of expenditure] of the Financial Administration Act does not apply to the appropriation under subsection 125(1).

Division 4 — Legal Services

Section 126 – Tax If Legal Services Provided In British Columbia

PST - SEC.126/Int.-R.1

References:

Act: Section 1 "legal services", "purchase price", "tangible personal property"; Section 20; Section 28; Section 127

PSTR: Section 9

Bulletin PST 106

Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 provides under section 126 the taxing provision that imposes tax on legal services provided in British Columbia.

Subsection 126(1) provides that if the purchaser or recipient of legal services provided in British Columbia resides, ordinarily resides or carries on business in British Columbia, the purchaser must pay to the government tax on the provision of the legal services at the rate of 7% of the purchase price of the legal services.

Subsection 126(2) provides that if neither the purchaser nor the recipient of legal services provided in British Columbia resides, ordinarily resides or carries on business in British Columbia, the purchaser must pay to the government tax on the provision of the legal services at the rate of 7% of the purchase price of the legal services if the legal services are in relation to one or more of the following:

(a) real property situated in British Columbia;

(b) tangible personal property, within the meaning of paragraph (a) of the definition of "tangible personal property", that is, or that is contemplated to be,

(i) ordinarily situated in British Columbia, or

(ii) delivered in British Columbia;

(c) property, other than that referred to in paragraphs 126(2)(a) and 126(2)(b), that is, or is contemplated to be, owned, possessed or used in British Columbia;

(d) a right to use property referred to in paragraph 126(2)(c) that is, or is contemplated to be, used in British Columbia;

(e) a court or any other proceeding in British Columbia or a possible such proceeding;

(f) the incorporation or contemplated incorporation of a corporation under the Business Corporations Act or the Society Act, or the registration or contemplated registration of a corporation as an extraprovincial company under the Business Corporations Act or as an extraprovincial society under the Society Act;

(g) any other matter that relates to British Columbia and is prescribed for the purposes of section 126 (currently, nothing is prescribed).

Section 28 [when tax is payable in respect of a purchase or lease] provides for when tax is payable under section 126.

Exemptions from tax under Division 4 [Legal Services] of Part 5 [Taxes in Relation to Services] are provided under section 128 [exemption in relation to legal aid] and PSTERR Division 4 [Legal Services] of Part 4 [Exemptions in Relation to Services].

R. 1 Tax Court of Canada and the Federal Court Trial Division (Issued: 2014/08)

Proceedings in the Tax Court of Canada and the Federal Court Trial Division may be commenced in one province and completed in another, depending on convenience of all parties concerned.

Under subparagraph 126(2)(e), non-residents are required to pay tax on legal services in relation to court proceedings in BC. If the proceeding is commenced in BC and heard in BC, all legal services are subject to PST. If the proceeding is commenced in BC and heard in another jurisdiction, legal services provided up to the time of the order to establish the place of hearing are subject to PST. Services after the date of the order are in relation to a proceeding at the place of hearing and are not subject to PST.

Section 127 – Tax If Legal Services Provided To British Columbia Resident

PST - SEC.127/Int.

References:

Act: Section 1 "collector", "legal services"; Section 20; Section 28; Section 126; Section 181; Section 246

Bulletin PST 106

Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 provides under section 127 the taxing provision that imposes tax on a person who resides, ordinarily resides or carries on business in British Columbia who purchases legal services provided outside British Columbia that relate to British Columbia.

Subsection 127(1) provides that a person who

(a) resides, ordinarily resides or carries on business in British Columbia, and

(b) is the purchaser of legal services provided outside British Columbia that relate to British Columbia

must pay to the government tax in respect of the legal services at the rate of 7% of the purchase price of the legal services.

Subsection 127(2) provides that for the purposes of subsection 127(1), legal services relate to British Columbia if they relate to any of the following:

(a) a matter referred to in paragraphs 126(2)(a) to (g) [tax if legal services provided in British Columbia];

(b) a matter that involves the interpretation or application of an enactment as defined in the Interpretation Act or a former or proposed such enactment;

(c) a matter that involves the interpretation or application of an enactment, or a former or proposed enactment, of a jurisdiction other than British Columbia, if the matter is in relation to

(i) a physical or legal presence in British Columbia or a contemplated such presence,

(ii) an activity in British Columbia or a contemplated such activity, or

(iii) a transaction in British Columbia or a contemplated such transaction;

(d) a matter that involves the analysis or application of any law other than that referred to in paragraphs 127(2)(b) and 127(2)(c), if the matter is in relation to

(i) a physical or legal presence in British Columbia or a contemplated such presence,

(ii) an activity in British Columbia or a contemplated such activity, or

(iii) a transaction in British Columbia or a contemplated such transaction;

(e) a contract or covenant, or a contemplated contract or covenant, that is in relation to

(i) a physical or legal presence in British Columbia or a contemplated such presence,

(ii) an activity in British Columbia or a contemplated such activity, or

(iii) a transaction in British Columbia or a contemplated such transaction.

Subsection 127(3) provides that a person referred to in subsection 127(1) is exempt from tax under that subsection in relation to that portion of the purchase price which is for legal services that relate to a jurisdiction other than British Columbia if

(a) the person resides, ordinarily resides or carries on business outside British Columbia as well as in British Columbia, and

(b) part of the legal services referred to in subsection 127(1) relates to a jurisdiction other than British Columbia in the same manner as legal services relate to British Columbia within the meaning of subsection 127(2).

Subsection 127(4) provides that for the purposes of subsection 127(3), the person referred to in that subsection must

(a) make a reasonable estimate, subject to the regulations (currently, nothing is provided in the regulations), of that portion of the purchase price that relates to legal services referred to in paragraph 127(3)(b),

(b) make and retain a record of the estimate and the basis on which it is made, and

Section 28 [when tax is payable in respect of a purchase or lease] provides for when tax is payable under section 127.

Section 128 – Exemption In Relation To Legal Aid

PST - SEC.128/Int.

References:

Act: Section 1 "legal services"; Part 5 – Division 4

Bulletin PST 106

Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 provides under section 128 that legal services provided to an individual are exempt from tax under Division 4 [Legal Services] of Part 5 [Taxes in Relation to Services]:

(a) to the extent that the purchase price for the services is paid by the Legal Services Society, or by a funded agency within the meaning of the Legal Services Society Act, for the purposes of section 9 of that Act, and

(b) to the extent that the purchase price for the services is paid by the individual, if the purchase price of the services is paid partly by that individual and partly by the Legal Services Society, or by a funded agency within the meaning of the Legal Services Society Act, for the purposes of section 9 of that Act.

Section 129 – Deemed References If Person Providing Legal Services Is Partner Or Employee

PST - SEC.129/Int.

References:

Act: Section 1 "legal services"

Bulletin PST 106

Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 provides under section 129 that if the person providing legal services does so as a partner in a partnership or as an employee of an individual, partnership or corporation, a reference in the Act to that person is deemed to be a reference to the individual, partnership or corporation.

Division 5 — Telecommunication Services

Section 130 – Tax On Telecommunication Service

PST - SEC.130/Int.-R.3

References:

Act: Section 1 "collector", "dedicated telecommunication service", "director", "purchase price", "telecommunication service"; Section 28; Section 130.1; Section 131; Section 132; Section 134; Section 134.2; Section 147; Section 153; Section 203

PSTERR: Section 89

PSTR: Section 86

Bulletin PST 107

Interpretation (Issued: 2013/12)

Subsection 130(1) provides that a purchaser of a telecommunication service must pay to the government tax on the provision of the telecommunication service at the rate of 7% of the purchase price of that telecommunication service.

Subsection 130(1.1) provides that subsection 130(1) does not apply to a purchaser of a telecommunication service if the purchaser must pay tax under section 130.1 [tax on telecommunication service purchased substantially for resale] in relation to the telecommunication service.

Subsection 130(2) provides that subject to section 132 [calculation if telecommunication only partly through dedicated system], subsection 130(1) does not apply to a purchaser of a dedicated telecommunication service if the purchaser must pay tax under section 131 [tax on dedicated telecommunication service] in relation to the dedicated telecommunication service.

Subsection 130(2.1) provides that if a collector sells a telecommunication service to a person who alleges that the person must pay tax under section 130.1 in relation to the telecommunication service, the collector must nevertheless levy and collect the tax under subsection 130(1) unless the collector obtains from that person, at the time the tax is payable,

(a) that person's registration number or, if that person does not have a registration number, a declaration in a form acceptable to the director from that person (a Certificate of Exemption – General (form FIN 490)), and

(b) any information or document required by the director.

Subsection 130(3) provides that if a collector sells a telecommunication service to a person who alleges that the person is exempt under section 134 [exemption if telecommunication service purchased for resale] or section 134.2 [exemption in relation to copying content of telecommunication service or broadcasting] or under prescribed provisions of the regulations (currently, no provisions are prescribed) from paying the tax under subsection 130(1), the collector must nevertheless levy and collect the tax under subsection 130(1) unless the collector obtains from that person, at or before the time the tax is payable,

(a) a declaration in a form acceptable to the director, if required by the regulations,

(b) any information or document required by the regulations (as required by PSTERR section 89 [evidence relating to exemptions under section 130 (3) of Act], in relation to a person who alleges that a telecommunication service is exempt under section 134, the collector is required to obtain that person’s registration number or, if that person does not have a registration number, a Certificate of Exemption – General (form FIN 490)), and

Section 28 [when tax is payable in respect of a purchase or lease] provides for when tax is payable under section 130.

Exemptions from tax under Division 5 [Telecommunication Services] of Part 5 [Taxes in Relation to Services] are provided under:

section 134 [exemption if telecommunication service purchased for resale];
section 134.1 [exemption for activities outside British Columbia in relation to telecommunication];
section 134.2 [exemption in relation to copying content of telecommunication service or broadcasting];
PSTERR Division 5 [Telecommunication Services] of Part 4 [Exemptions in Relation to Services].

R.1 Internet Cafes (Issued: 2014/04)

Internet cafes provide computers from which customers can access the Internet in addition to selling food and beverages. Generally, Internet cafes charge their customers a fee per hour /minute for use of the computer and Internet access.

When a customer pays a fee for the use of a computer and Internet access, PST applies to the full purchase price because the fee includes only taxable components: the purchase of a "telecommunication service" (Internet access) and a lease of TPP (i.e., the computer).

If the cafe purchases Internet access solely for the purpose of selling or providing the Internet access to its customers, the cafe may purchase the Internet access exempt in accordance with section 134. However, if the cafe makes a single purchase of Internet access, some of which is resold and some of which the cafe uses for its own business use, the full purchase of Internet access by the cafe is subject to PST.

If the cafe purchases or leases the computers solely for the purpose of leasing the computers to its customers, the cafe may purchase /lease the computers exempt in accordance with section 142 [exemptions for tangible personal property intended for lease]. However, the cafe must pay PST on the full purchase price of any of these computers that it also uses for its own business use.

R.2 Collocation Services (Issued: 2014/04)

Collocation (or collocation) services allow a business to store their server in a secure, temperature controlled facility. Generally, collocation service providers provide customers with space, power, and bandwidth for their servers. Space in the collocation facility is generally leased by the rack or partial rack, cabinet, cage or room and bandwidth and power may be provided based on customer needs.

The application of PST to collocation services is as follows:

Racks

The application of PST to racks, cabinets, cages or rooms will depend on whether the customer is leasing TPP or real property or acquiring the right to store a server:

If the contract is for the lease of a rack or cabinet and the rack or cabinet is TPP, the lease is subject to PST.
If the lease is for real property (e.g., a room or a cage or rack that is real property), the lease is not subject to PST. Real property is land and anything that is attached to the land in such a way that 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 the contract consists solely of the right to store a server and not the lease of TPP, PST does not apply.

Bandwidth

When a collocation facility is located in BC, the provision of bandwidth or network connectivity is a "telecommunication service" because it is the right to utilize a "telecommunication system" to send or receive a "telecommunication" by means of an "electronic device" (the server) ordinarily situated in BC. As a result, any charge for the provision of bandwidth or network connectively is subject to PST.

Power

Power, in the form of electricity, is subject to PST as a purchase of TPP when sold for a business purpose.

Bundled Purchases

If the purchaser of the collocation services is charged separately for the above components of the collocation service, PST only applies to the taxable portions. However, where a purchaser purchases collocation services that includes both taxable (e.g., bandwidth) and non-taxable (e.g., lease of real property) components for a single charge, section 26 applies. Under this section, PST generally applies to the fair market value of the taxable component included in the bundled purchase. However, subsection 26(4) includes an exception to this general rule. The purchase price is subject to PST in full if either of the following applies:

the fair market value of the taxable component (e.g., bandwidth) is greater than 90% of the full price of the bundled sale, and the full price is less than $500, or
the non-taxable component (e.g., lease of real property) is not ordinarily available for sale separate from the taxable component or is not ordinarily provided separate from the taxable component for a price (note that this condition is not restricted to the specific provider making the sale). For example, if the lease of rack space is not ordinarily available for sale separately from the purchase of electricity and bandwidth from collocation providers, PST applies to the full purchase price.

R.3 Teleconferencing And Videoconferencing Services (Issued: 2014/04)

Teleconferencing services allow participants to call a single phone number (generally a local or toll-free number) where they enter a specific code to be connected to other participants in the teleconference.

Videoconferencing services are similar to teleconferencing services. However, the participants connect to other participants through the Internet instead of through the telephone system. The application of PST to purchases of videoconferencing services is generally the same as the application to teleconferencing services described below.

Teleconferencing providers generally utilize a conference bridge, which is essentially a server that acts like a telephone and can answer multiple calls simultaneously, combining their signals and allowing them to participate in a single call.

A "telecommunication system" is defined as: "a wire, cable, radio, optical or other electromagnetic system, or a similar technical system, for the transmission, emission or reception of a telecommunication". Because the conference bridge is a system that transmits, emits or receives telecommunications, it meets the definition of a telecommunication system.

A purchase of a teleconferencing service provides the purchaser with the right to utilize a telecommunication system to send or receive a telecommunication. It is subject to PST as a telecommunication service if the purchaser acquires that right to send or receive the telecommunication by means of an electronic device ordinarily situated in BC (see Bulletin PST 107 for information on determining where an electronic device is ordinarily situated). The location of the teleconferencing service provider's conference bridging equipment is not relevant to the application of PST to the services sold by the provider.

The following are examples of the application of PST to teleconferencing services:

Example 1

Company A is purchasing the teleconferencing services for a teleconference with Companies B and C.
Company A will be participating by means of a telephone in BC.
Company B and Company C are both located outside BC and will be participating on electronic devices ordinarily situated outside BC.
Company A is purchasing the right to utilize a telecommunication system to send or receive telecommunications by means of an electronic device ordinarily situated in BC. The teleconference provider will be required to charge PST on the purchase of the teleconferencing service by Company A.

Example 2

Company A is purchasing the teleconferencing services for a teleconference with Companies B and C.
Company A will be participating by means of a telephone in Alberta. They will not be utilizing a telecommunication system to send or receive telecommunications by means of an electronic device ordinarily situated in BC.
Company B and Company C are both located outside BC and will be participating on electronic devices ordinarily situated outside BC.
Company A is purchasing the right to utilize a telecommunication system to send or receive telecommunications by means of an electronic device ordinarily situated outside of BC. The teleconference provider will not be required to charge PST on the teleconference services even if the teleconference provider is located in BC.

Example 3

Company A is purchasing the teleconferencing services for a teleconference with Companies B and C.
Company A will be participating by means of a telephone in Alberta. They will not be utilizing a telecommunication system to send or receive telecommunications by means of an electronic device ordinarily situated in BC.
Company B and Company C are both located inside BC and will be participating on electronic devices ordinarily situated in BC.

Company A is purchasing the right to utilize a telecommunication system to send or receive telecommunications by means of an electronic device ordinarily situated outside of BC. The teleconference provider will not be required to charge PST on the teleconference even if the teleconference provider is located in BC.

Section 130.1 – Tax On Telecommunication Service Purchased Substantially For Resale

PST - SEC.130.1/Int.

References:

Act: Section 1 "purchase price", "registrant", "telecommunication service"; Section 130; Section 130.2; Section 130.3; Section 192

PSTR: Section 67; Section 79

Bulletin PST 107

Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 added section 130.1.

Section 130.1 provides the taxing provision that imposes a proportional amount of tax on a person who purchases a telecommunication service for the purposes of selling or providing to other persons more than 90% of the telecommunication service. Tax is payable on the portion of the purchase price of the telecommunication service that is attributable to the portion purchased other than for the purpose of selling or providing to other persons that telecommunication service.

If, at the end of a month, the portion of the telecommunication service that is stored, kept or retained by the purchaser for the purpose of resale or that has been resold by the purchaser is less than the portion used in calculating the tax payable under subsection 130.1(1), additional tax is payable under section 130.2 [additional tax on telecommunication service purchased substantially for resale] and/or section 130.3 [tax on telecommunication service if no longer substantially for resale].

If the portion of the telecommunication service that is stored, kept or retained by the purchaser for the purpose of resale or that has been sold by the purchaser is more than the portion used in calculating the tax payable under subsection 130.1(1), a refund of tax paid or payable under section 130.1 is not available.

Subsection 130.1(1) provides that a purchaser whose primary business is selling or providing telecommunication services and who purchases a telecommunication service for the purpose of selling or providing to other persons more than 90% of the telecommunication service must pay to the government tax at the rate of 7% of the amount equal to the portion of the purchase price of the telecommunication service that is attributable to the portion of the telecommunication service that is purchased other than for the purpose of selling or providing to other persons that telecommunication service.

Subsection 130.1(2) provides that tax payable under subsection 130.1(1) must be paid on or before the last day of the month after the month in which the telecommunication service is purchased.

Subsection 130.1(3) provides that despite subsection 130.1(2), tax payable under subsection 130.1(1) by a registrant must be paid

on or before the prescribed date (as provided under PSTR section 67 [section 130.1 of Act – tax on telecommunication service purchased substantially for resale]; see PSTR/Sec. 67/Int.), and
in the prescribed manner (as provided under PSTR subsection 79(2) [manner for payment of tax]; see PSTR/Sec.79/Int.).

Exemptions from tax under Division 5 [Telecommunication Services] of Part 5 [Taxes in Relation to Services] are provided under:

section 134 [exemption if telecommunication service purchased for resale];
section 134.1 [exemption for activities outside British Columbia in relation to telecommunication];
section 134.2 [exemption in relation to copying content of telecommunication service or broadcasting];
PSTERR Division 5 [Telecommunication Services] of Part 4 [Exemptions in Relation to Services].

Section 130.2 – Additional Tax On Telecommunication Service Purchased Substantially For Resale

PST - SEC.130.2/Int.

References:

Act: Section 1 "registrant", "telecommunication service"; Section 130.1; Section 130.3; Section 192

PSTR: Section 68; Section 79

Bulletin PST 107

Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 added section 130.2.

Section 130.2 provides the taxing provision that imposes an additional proportional amount of tax on a person who is required to pay tax under section 130.1 but, at the end of a month, the portion of the telecommunication service that either is stored, kept or retained by the purchaser for the purpose of resale or that has been resold by the purchaser is more than 90% of that telecommunication service but less than the portion used in calculating the tax payable under subsection 130.1(1).

Subsection 130.2(1) provides that section 130.2 applies to a purchaser of a telecommunication service if

(a) the purchaser must pay tax under section 130.1 [tax on telecommunication service purchased substantially for resale] in relation to the telecommunication service, and

(b) at the end of a month, the portion of the telecommunication service that is stored, kept or retained by the purchaser for the purpose of selling or providing to other persons that telecommunication service or that has been sold or provided to other persons by the purchaser is more than 90% of that telecommunication service but less than the portion of that telecommunication service, used in calculating the tax payable under subsection 130.1(1), that was purchased for the purpose of selling or providing to other persons that telecommunication service.

Subsection 130.2(2) provides that a purchaser to whom section 130.2 applies must pay to the government tax at the rate of 7% of the amount equal to the purchase price of the telecommunication service less the portion of the purchase price of the telecommunication service that is attributable to the portion of the telecommunication service that is stored, kept or retained by the purchaser for the purpose of selling or providing to other persons that telecommunication service or that has been sold or provided to other persons by the purchaser.

Subsection 130.2(3) provides that the amount of tax payable under subsection 130.2(2) by a purchaser in relation to the telecommunication service is reduced by the amount of tax previously paid under subsection 130.2(2) and section 130.1 by the purchaser in relation to that telecommunication service.

Subsection 130.2(4) provides that tax payable under subsection 130.2(2) must be paid on or before the last day of the month after the month referred to in paragraph 130.2(1)(b) in relation to the purchaser of the telecommunication service.

Subsection 130.2(5) provides that despite subsection 130.2(4), tax payable under subsection 130.2(2) by a registrant must be paid

on or before the prescribed date (as provided under PSTR section 68 [section 130.2 of Act – additional tax on telecommunication service purchased substantially for resale]; see PSTR/Sec. 68/Int.), and
in the prescribed manner (as provided under PSTR subsection 79(2) [manner for payment of tax]; see PSTR/Sec.79/Int.).

Exemptions from tax under Division 5 [Telecommunication Services] of Part 5 [Taxes in Relation to Services] are provided under:

section 134 [exemption if telecommunication service purchased for resale];
section 134.1 [exemption for activities outside British Columbia in relation to telecommunication];
section 134.2 [exemption in relation to copying content of telecommunication service or broadcasting];
PSTERR Division 5 [Telecommunication Services] of Part 4 [Exemptions in Relation to Services].

Section 130.3 – Tax On Telecommunication Service If No Longer Substantially For Resale

PST - SEC.130.3/Int.

References:

Act: Section 1 "registrant", "telecommunication service"; Section 130.1; Section 130.2; Section 192

PSTR: Section 69; Section 79

Bulletin PST 107

Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 added section 130.3.

Section 130.3 provides the taxing provision that imposes an additional amount of tax on a person who is required to pay tax under section 130.1 where, at the end of a month, the portion of the telecommunication service that either is stored, kept or retained by the purchaser for the purpose of resale or that has been resold by the purchaser is 90% or less.

Subsection 130.3(1) provides that section 130.3 applies to a purchaser of a telecommunication service if

(a) the purchaser must pay tax under section 130.1 [tax on telecommunication service purchased substantially for resale] in relation to the telecommunication service, and

(b) at the end of a month, 90% or less of the telecommunication service is stored, kept or retained by the purchaser for the purpose of selling or providing to other persons that telecommunication service or has been sold to other persons by the purchaser.

Subsection 130.3(2) provides that a purchaser to whom section 130.3 applies must pay to the government tax at the rate of 7% of the purchase price of the telecommunication service.

Subsection 130.3(3) provides that the amount of tax payable under subsection 130.3(2) by a purchaser in relation to the telecommunication service is reduced by the amount of tax paid under section 130.1 and section 130.2 [additional tax on telecommunication service purchased substantially for resale] by the purchaser in relation to that telecommunication service.

Subsection 130.3(4) provides that tax payable under subsection 130.3(2) must be paid on or before the last day of the month after the month referred to in paragraph 130.3(1)(b) in relation to the purchaser of the telecommunication service.

Subsection 130.3(5) provides that despite subsection 130.3(4), tax payable under subsection 130.3(2) by a registrant must be paid

on or before the prescribed date (as provided under PSTR section 69 [section 130.3 of Act – tax on telecommunication service if no longer substantially for resale]; see PSTR/Sec. 69/Int.), and
in the prescribed manner (as provided under PSTR subsection 79(2) [manner for payment of tax]; see PSTR/Sec.79/Int.).

Exemptions from tax under Division 5 [Telecommunication Services] of Part 5 [Taxes in Relation to Services] are provided under:

section 134 [exemption if telecommunication service purchased for resale];
section 134.1 [exemption for activities outside British Columbia in relation to telecommunication];
section 134.2 [exemption in relation to copying content of telecommunication service or broadcasting];
PSTERR Division 5 [Telecommunication Services] of Part 4 [Exemptions in Relation to Services].

Section 131 – Tax On Dedicated Telecommunication Service

PST - SEC.131/Int.-R.2

References:

Act: Section 1 "dedicated telecommunication service", "dedicated telecommunication system", "electronic device", "purchase price"; Section 28; Section 130; Section 132

Bulletin PST 107

Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 provides under section 131 the taxing provision that imposes tax on the purchase of a dedicated telecommunication service provided in British Columbia.

Subsection 131(1) provides that a purchaser of a dedicated telecommunication service provided in British Columbia must pay to the government tax calculated in accordance with subsection 131(2).

Subsection 131(2) provides that the tax payable under subsection 131(1) must be calculated in accordance with the following formula:

tax = 7% X purchase price X (BC distance /total distance)

where:

purchase price = the purchase price of the dedicated telecommunication service;

BC distance = the portion of the distances comprising the total distance that is within British Columbia;

total distance = whichever of the following is applicable:

(a) if the dedicated telecommunication system does not include an electronic device that is a satellite, the total of the distances, measured in a direct line, between electronic devices that are connected to the system, with the distance between any 2 electronic devices connected to the system included only once in the calculation of total distance;

(b) if the dedicated telecommunication system does include an electronic device that is a satellite, the total of the distances, measured in a direct line, between electronic devices that are connected to the system but that are not satellites, with the distance between any 2 of these electronic devices included only once in the calculation of total distance.

Section 28 [when tax is payable in respect of a purchase or lease] provides for when tax is payable under section 131.

Exemptions from tax under Division 5 [Telecommunication Services] of Part 5 [Taxes in Relation to Services] are provided under:

section 134 [exemption if telecommunication service purchased for resale];
section 134.1 [exemption for activities outside British Columbia in relation to telecommunication];
section 134.2 [exemption in relation to copying content of telecommunication service or broadcasting];
PSTERR Division 5 [Telecommunication Services] of Part 4 [Exemptions in Relation to Services].

R.1 Examples Of Interjurisdictional Dedicated Telecommunication Services (Issued: 2014/04)

Example 1

Company A in Ontario transmits television signals to Company B in BC. A combination of the following service providers are used to transmit the signal through dedicated telecommunication systems:

An Ontario telecommunication provider (OnTelCo) transmits the signal from the Ontario station to a satellite transmitter in Ontario,
A satellite transmission company (SatCo) transmits the signal from Ontario to BC via satellite, and
A BC telecommunication provider (BCTelCo) transmits the signal from the satellite receiver in BC to Company B's broadcasting station in BC.

Company B is billed by for the entire transmission by BCTelCo. PST is payable on the purchase on a prorated basis using the proportional PST formula of BC distance over total distance as follows:

If it is a single charge for transmission, PST is calculated by measuring the total BC distance (the portion the signal travels from the BC border to the BC satellite receiver and the BC receiver to the BC station) and dividing that total by the total distance the transmission travels (from the Ontario station to the Ontario transmitter, the Ontario transmitter to the BC receiver and the BC receiver to the BC station). This percentage is then multiplied by the PST rate. Note that when calculating transmission distances by satellite you only calculate the straight-line distance between the earth-bound transmitter and receiver and not any distance to the satellite.

Example 2

An American television broadcaster (AmTel) purchases access to a dedicated satellite channel to transmit program broadcasts from point in the United States to cable companies in BC. The signal is transmitted to a single receiver in BC.

PST is payable by the AmTel on its purchase of the satellite transmission on a proportional basis using the proportional PST formula of BC distance over total distance and multiplying it by the PST rate. The multiplier is calculated by measuring the distance in a straight line from the BC border to the receiver in BC and dividing that total by the total distance from the transmission point in the US to the receiver in BC. Note that when calculating transmission distances by satellite you only calculate the straight-line distance between the earth-bound transmitter and receiver and not any distance to the satellite.

R.2 Dedicated Satellite Or Microwave Networks (Issued: 2014/04)

A telecommunications company provides a customer with a satellite or microwave system allowing the customer to transmit and receive signals among the customer's various locations. The channels, or partial channels, used to provide the service are dedicated to the exclusive use of that particular customer.

System with Two Locations Only

If both locations are in BC, the total distance comprising the dedicated telecommunication system is within BC. PST at the prevailing rate applies to the full purchase price for the dedicated telecommunication service.

If one transmitter/receiver is located in BC and the other is located outside the province (e.g., Saskatchewan), the proportional PST formula is used to determine the PST payable. For the purposes of the formula, the total distance is the most direct land distance between the BC location and the Saskatchewan location. The BC distance is the distance between the BC location and the BC/Alberta border following the same line used to calculate the total distance.

System with More Than Two Locations

If all locations are within BC, the total distance comprising the dedicated telecommunication system is within BC. PST at the applicable rate applies to the full purchase price for the dedicated telecommunication service.

If the transmissions are to and from two locations in Alberta and one location in BC, the proportional PST formula is used to determine the PST payable. For the purposes of the formula, the total distance of the transmission may be calculated by averaging the most direct land distance between the BC location and the two Alberta locations. The BC distance is the average of the distances between the BC location and the BC/Alberta border following the two same lines used to calculate total distance.

Note: If preferred, PST may be calculated using the actual distances of all the locations, rather than the average distance.

Section 132 – Calculation If Telecommunication Only Partly Through Dedicated System

PST - SEC.132/Int.-R.1

References:

Act: Section 1 "dedicated telecommunication service", "dedicated telecommunication system", "director", "purchase price", "telecommunication", "telecommunication service"; Section 130; Section 131

Bulletin PST 107

Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 provides under section 132 the taxing provision that imposes tax on a telecommunication service that is purchased for the purposes of sending from British Columbia or receiving in British Columbia a telecommunication where the telecommunication is effected in part through a dedicated telecommunication system and in part through a system that is not a dedicated telecommunication system.

Subsection 132(1) provides that section 132 applies if

(a) a person purchases a telecommunication service for the purposes of sending from British Columbia or receiving in British Columbia a telecommunication, and

(b) the telecommunication is effected in part through a dedicated telecommunication system and in part through a telecommunication system that is not a dedicated telecommunication system.

Subsection 132(2) provides that the tax payable by the purchaser on the provision of the telecommunication service referred to in subsection 132(1) must be calculated as follows:

(a) the tax payable on the portion of the purchase price that is attributable to the dedicated telecommunication system must be calculated in accordance with subsection 131(2) [tax on dedicated telecommunication service];

(b) the tax payable on the portion of the purchase price that is attributable to a telecommunication system that is not a dedicated telecommunication system must be calculated in accordance with section 130 [tax on telecommunication service].

Subsection 132(3) provides that if the purchase price for a telecommunication service is only partly payable for a dedicated telecommunication service, for the purposes of subsection 132(2), the director may determine the portion of the purchase price that is attributable to the dedicated telecommunication system.

R.1 Partially Dedicated Calculation Examples (Issued: 2014/04)

When a telecommunication service is delivered by a combination of a dedicated telecommunication service and a non-dedicated telecommunication service, the portion of the purchase price that is attributable to the dedicated telecommunication service is subject to PST based on the proportional tax formula established under subsection 131(2). The portion of the purchase price that is attributable to the non-dedicated telecommunication service is subject to PST as provided under section 130.

For example, a customer in Vancouver is provided with a private dedicated line running from a British Columbia location to a network switching facility located in Seattle, Washington. The network switching facility automatically connects the customer to a U.S. long distance telecommunications network, which allows the customer to dial a long distance call anywhere in the United States. The service provider bills the customer for their use of the U.S. long distance service on a per-minute basis, and charges a separate fixed monthly fee for the private dedicated line.

In determining the application of PST, the U.S. long distance telecommunication service is not considered to be a separate service that originates outside of the province. Rather, the U.S. long distance service is a continuation of the overall telecommunication service that originates in British Columbia. In the above example, tax will therefore apply as follows:

The charge for the private dedicated line is subject to PST according to the proportional formula, based on the ratio of the distance of the line in British Columbia to the total distance of the line. The PST due is calculated by multiplying the monthly charge for the line by this ratio, and then by the PST rate.
The per-minute charges for calls placed through the U.S. long distance service are subject to PST under section 130 because the person is provided with the right to make phone calls by means of an electronic device that is ordinarily situated in BC.

Section 132.1 – Tax If Telecommunication Service Used For New Purpose

PST - SEC.132.1/Int.

References:

Act: Section 1 "purchase price", "registrant", "telecommunication service"; Section 192

PSTR: Section 70; Section 79

Bulletin PST 107

Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 added section 132.1.

Section 132.1 provides the change in use taxing provision that imposes tax if a person purchased a telecommunication service that was exempt from tax because the telecommunication service was to be used for a particular purpose, and the person subsequently uses that telecommunication service, or allows that telecommunication service to be used, for a taxable purpose.

Subsection 132.1(1) provides that if a person

(a) purchased a telecommunication service that was exempt from tax under the Act because the telecommunication service was to be used for a particular purpose, and

(b) subsequently uses that telecommunication service, or allows that telecommunication service to be used, for a purpose other than

(i) the particular purpose, or

(ii) another purpose for which that telecommunication service would be exempt from tax under the Act if that telecommunication service were to be used for that purpose,

the person must pay to the government tax at the rate of 7% of the purchase price of that telecommunication service.

Subsection 132.1(2) provides that tax payable under subsection 132.1(1) must be paid on or before the last day of the month after the month in which the person first uses the telecommunication service, or allows the telecommunication service to be used, as referred to in paragraph 132.1(1)(b).

Subsection 132.1(3) provides that despite subsection 132.1(2), tax payable under subsection 132.1(1) by a registrant must be paid

on or before the prescribed date (as provided under PSTR section 70 [section 132.1 of Act – tax if telecommunication service used for new purpose]; see PSTR/Sec. 70/Int.), and
in the prescribed manner (as provided under PSTR subsection 79(2) [manner for payment of tax]; see PSTR/Sec.79/Int.).

Section 133 – Tax If Motion Picture Exhibited

PST - SEC.133/Int.

References:

Act: Section 1 "registrant", "telecommunication service"; Section 134.2; Section 192

PSTR: Section 71; Section 79

Bulletin PST 107

Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 as amended by Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 provides under section 133 the taxing provision that imposes tax where a telecommunication service in respect of a recording of a motion picture that was purchased exempt from tax under subparagraph 134.2(2)(b)(ii) is exhibited in a movie theatre or other public venue.

Subsection 133(1) provides that a person

(a) who purchased exempt from tax under subparagraph 134.2(2)(b)(ii) [exemption in relation to copying content of telecommunication service or broadcasting] a telecommunication service in respect of a recording of a motion picture, and

(b) who exhibits the motion picture in a movie theatre or other public venue

must pay to the government tax in an amount equal to the amount of tax under the Act that would have otherwise been payable if the person had purchased the right or authority to exhibit the motion picture from a willing seller acting in good faith in an arm's length transaction in the open market.

Subsection 133(2) provides that tax payable under subsection 133(1) must be paid on or before the last day of the month after the month in which the motion picture is exhibited.

Subsection 133(3) provides that despite subsection 133(2), tax payable under subsection 133(1) by a registrant must be paid

on or before the prescribed date (as provided under PSTR section 71 [section 133 of Act – tax if motion picture exhibited]; see PSTR/Sec. 71/Int.), and
in the prescribed manner (as provided under PSTR subsection 79(2) [manner for payment of tax]; see PSTR/Sec.79/Int.).

Section 134 – Exemption If Telecommunication Service Purchased For Resale

PST - SEC.134/Int.-R.1

References:

Act: Section 1 "telecommunication service"; Part 5 – Division 5; Section 130; Section 135

PSTERR: Section 89

Bulletin PST 107

Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 as amended by Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 provides under section 134 that, subject to section 135 [exemptions not applicable to small seller], a purchaser who purchases a telecommunication service is exempt from tax imposed under Division 5 [Telecommunication Services] of Part 5 [Taxes in Relation to Services] on that purchase if the purchase is made solely for the purpose of selling or providing to other persons that telecommunication service.

R.1 Television Broadcasters (Issued: 2014/04)

Television broadcasters may purchase transmission services from telecommunication providers to extend their broadcast range (e.g., access to a transmission line or satellite channel).

The transmissions may be between studios, to cable companies, or to microwave or satellite dishes. When television broadcasters purchase transmission services for use on electronic devices ordinarily situated in BC, they are required to pay PST because they are purchasing telecommunication services. Even though the television broadcaster may eventually be broadcasting signals to customers, the transmission services are not purchased for resale because they are not resold by the broadcaster to its customers. Rather, the broadcaster is purchasing the transmission services for its own use in providing telecommunication services to its customers.

For example, a television broadcaster's programs are carried on cable television. The broadcaster purchases transmission services to transmit the signal to the cable company. The broadcaster is required to pay PST on the transmission services because it is purchasing the transmission services for its own use to transmit its broadcast to the cable company.

A telecommunication service only qualifies for exemption under section 134 if the same telecommunication service is subsequently resold.

For example, if a television broadcaster purchases a telecommunication service in the form of a video and then charges its customers when they view the video through a pay-per-view service, the broadcaster may purchase the video exempt from PST because the video is purchased for purpose of selling the video to other persons.

Section 134.1 – Exemption For Activities Outside British Columbia In Relation To Telecommunication

PST - SEC.134.1/Int.-R.1

References:

Act: Section 1 "electronic device", "telecommunication", "telecommunication service"; Part 5 – Division 5

Bulletin PST 107

Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 added section 134.1.

Section 134.1 provides that the sending or receiving of a telecommunication by means of an electronic device that is ordinarily situated in British Columbia is exempt from tax imposed under Division 5 [Telecommunication Services] of Part 5 [Taxes in Relation to Services] if

(a) the telecommunication originates outside British Columbia and is received outside British Columbia, and

(b) any charges in respect of the telecommunication are segregated on the invoice provided to the purchaser of the telecommunication service.

For example, the exemption under section 134.1 would apply if a BC resident takes their cellphone to Ontario and makes calls within Ontario and to Alberta, provided that the BC resident is charged separately for those calls on their invoice.

R.1 Telecommunications Originating And/Or Terminating In British Columbia Waters (Issued: 2014/04; Revised 2014/07)

According to case law, the boundary of British Columbia ends at the low water mark, with the exception of inland water, including harbours, bays, estuaries and other waters lying "between the jaws of the land" or from headland to headland.

For the purposes of determining whether a telecommunication originates or is received in British Columbia, the following waters are considered to be internal waters and therefore, within British Columbia:

inland waters (e.g., lakes and rivers),
waters in coastal bays, inlets, etc., as marked from headland to headland,
Hecate and Johnstone Straits,
the Canadian portions of Georgia and Juan de Fuca Straits, and
Dixon Entrance and Queen Charlotte Sound.

Telecommunications originating from, or received in, these waters are considered to originate or be received in British Columbia for the purposes of section 134.1.

Section 134.2 – Exemption In Relation To Copying Content Of Telecommunication Service Or Broadcasting

PST - SEC.134.2/Int.

References:

Act: Section 1 "software", "telecommunication", "telecommunication service"; Part 5 – Division 5; Section 130; Section 133; Section 135

Bulletin PST 107

Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 added section 134.2.

Section 134.2 provides exemptions for a telecommunication referred to in subparagraphs (d)(i) to (d)(v) of the definition of "telecommunication service" if the telecommunication service is purchased for a specified purpose.

For example, music or a movie clip would be exempt under section 134.2 if it was purchased for the purpose of being incorporated into a video game or a toy for the purpose of sale.

Subsection 134.2(1) provides that in section 134.2, "content", in relation to a telecommunication service, means a telecommunication referred to in subparagraphs (d)(i) to (d)(v) of the definition of "telecommunication service".

Subsection 134.2(2) provides that subject to section 135 [exemptions not applicable to small seller], a telecommunication service described in paragraph (d) of the definition of "telecommunication service" is exempt from tax imposed under Division 5 [Telecommunication Services] of Part 5 [Taxes in Relation to Services] if the telecommunication service is purchased for the purpose of

(a) public broadcast by a licensed radio or television broadcaster,

(b) making copies of the content of the telecommunication service for

(i) public broadcast by a licensed radio or television broadcaster,

(ii) public exhibition in a movie theatre or other public venue, or

(iii) sale or lease,

(i) public broadcast by a licensed radio or television broadcaster,

(ii) public exhibition in a movie theatre or other public venue, or

(iii) sale or lease, or

(d) copying or incorporating the content of the telecommunication service into tangible personal property or Part 4 software for sale or lease.

Division 5.1 — Online Marketplace Services

Section 134.3 – Tax If Online Marketplace Service Provided In British Columbia

PST - SEC.134.3/Int.

References:

Act: Section 1 "accommodation", "collector", "eligible taxable service", "facilitate", "legal services", "lease", "online marketplace facilitator", "online marketplace seller", "online marketplace service", "original purchase price", "purchase price", "purchaser", "related service", "sale", "software", "tangible personal property", "taxable service", "telecommunication service", "use"; Section 21.1; Section 28; Section 134.4; Section 147; Section 153; Section 172.4; Section 174; Section 203

PSTR: Section 86; Section 88

PSTERR: Section 89.1

Bulletin PST 142

Interpretation (Issued: 2023/08)

Effective July 1, 2023, Bill 10, Budget Measures Implementation Act, 2023, repealed and replaced subsections 134.3(1) and 134.3(2). The new subsection 134.3(1) states that a purchaser of an online marketplace service must pay tax at the rate of 7% on the purchase, if the service is provided or to be provided:

To tangible personal property or in respect of storage of tangible personal property, if the tangible personal property is in B.C. at the time the service is provided or to be provided
In respect of accommodation in B.C.
In other cases, to a person in B.C., unless the online marketplace service is used wholly outside of B.C., per subsection 134.3(2)

This means that when determining if an online marketplace service is taxable, staff should first consider the nature of the service. For example, an online marketplace service to store goods (e.g., at a warehouse) that are located outside British Columbia is not subject to tax. Similarly, an online marketplace in respect of accommodation located outside British Columbia is not taxable even if the online marketplace seller (e.g., the property owner) is in British Columbia. However, a service that is not to tangible personal property, in respect of storage of tangible personal property, or in respect of accommodation located in British Columbia, is generally taxable if it is provided to a person in British Columbia. For example, if the online marketplace service is advertising, the advertising is taxable if provided to a person in British Columbia. The one exception to this is if the online marketplace service is provided to a person who wholly uses the service outside British Columbia. In the advertising example, if the advertising never appears in British Columbia, does not target British Columbians or otherwise get used in British Columbia, then the service is not subject to tax. Under the new section 134.3(1) there is no need to determine the location of the service. Under the previous version of the section, determining where the service was provided was administratively difficult.

Effective July 1, 2022, Bill 6, Budget Measures Implementation Act, 2022, created section 134.3. Subsection 134.3(1) states that a purchaser of an online marketplace service either provided or to be provided in B.C., or in respect of accommodation in B.C., must pay to the government tax at the rate of 7% on the purchase.

Subsection 134.3(2) states that a purchaser of an online marketplace service provided or to be provided in B.C. and related to the sale, provision or lease of tangible personal property or taxable services (other than legal services) for use in B.C., or the sale or provision of software for use on or with an electronic device ordinarily situated in B.C., must pay to the government tax at the rate of 7% on the purchase.

Subsection 134.3(3) provides that the tax payable under subsections (1) or (2) is reduced by the amount of tax otherwise payable or previously paid under this Act in relation to the online marketplace service and for which the person has not obtained and is not entitled to obtain a refund or credit. The intent of this provision is to prevent more than one taxing provision from applying to the online marketplace service. Because there is some overlap between related services, software, telecommunication services, and the type of services that fall within the definition of online marketplace services, a provision is needed to prevent any potential double taxation.

Subsection 134.3(4) states that if a collector sells an online marketplace service to a person who alleges they are exempt under section 134.4 [exemption if online marketplace service purchased for resale] or prescribed provisions, the person must still pay tax unless they provide a declaration form, if required by the regulations, and any information or document required by the regulations or the director.

Section 134.4 – Exemption If Online Marketplace Service Purchased For Resale

PST - SEC.134.4/Int.

References:

Act: Section 1 "online marketplace service", "small seller"; Section 121; Section 134.3; Section 135

PSTERR: Section 89.1

Interpretation (Issued: 2023/08)

Effective July 1, 2022, Bill 6, Budget Measures Implementation Act, 2022, created section 134.4, which exempts a purchaser of an online marketplace service from tax if the purchase is made solely for the purpose of reselling that online marketplace service. This exemption is subject to section 135, which notes it does not apply to small sellers. A provision like section 134.4 is similar to other resale exemptions for other services, such as section 121(2).

Section 134.5 – Tax If Online Marketplace Service Used For New Purpose

PST - SEC.134.5/Int.

References:

Act: Section 1 "online marketplace service", "registrant"; Section 64; Part 3 – Division 9; Section 109; Section 120.1; Section 123.2; Section 123.3; Section 134.4; Section 192

PSTR: Section 71.01; Section 79

Interpretation (Issued: 2023/08)

Effective July 1, 2022, Bill 6, Budget Measures Implementation Act, 2022, created section 134.5. If an online marketplace service was exempt from tax because it was to be used for a particular purpose (e.g. under Section 134.4, for resale), and it was then used for another, non-exempt purpose, then tax is payable, per subsection 134.5(2). Tax must be paid on or before the last day of the month after the month in which the person first uses the online marketplace service for another purpose.

Subsection 134.5(3) provides that despite subsection 134.5(2), tax payable by a registrant must be paid on or before the prescribed date and in the prescribed manner.

This is a common provision throughout the Act (such as section 64, Part 3 – Division 9, 109, 120.1, 123.2, 123.3, etc.) and ensures tax is paid when a good or service goes from an exempt to taxable use.

Division 6 — Exemptions in Relation to Taxable Service Purchased By or From Small Seller

Section 135 – Exemptions Not Applicable To Small Seller

PST - SEC.135/Int.

References:

Act: Section 1 "small seller", "taxable service"; Section 121; Section 134; Section 134.2; Section 134.4

Bulletin PST 003

Interpretation (Issued: 2013/12; Revised: 2023/08)

Effective July 1, 2022, Bill 6, Budget Measures Implementation Act, 2022, amended Section 135 to provide that the exemption set out in Section 134.4 [exemption if online marketplace service purchased for resale] does not apply in relation to a small seller who purchases a taxable service. This change means that a small seller cannot purchase online marketplace services exempt when they are purchased solely for resale.

subsection 121(2) [exemption if related service purchased for resale],
section 134 [exemption if telecommunication service purchased for resale],
section 134.2 [exemption in relation to copying content of telecommunication service or broadcasting], and
under prescribed provisions of the regulations (currently, nothing is prescribed)

do not apply in relation to a small seller who purchases a taxable service.

Section 136 – Exemption In Relation To Taxable Service Purchased From Small Seller

PST - SEC.136/Int.

References:

Act: Section 1 "accommodation", "small seller", "taxable service"; Part 5 – Division 1; Part 5 – Division 2; Part 5 – Division 4; Part 5 – Division 5

Bulletin PST 003

Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 as amended by Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 provides under section 136 that if a purchaser purchases a taxable service, other than accommodation, from a small seller, the person is exempt from tax imposed under

Division 1 [Services Related to Purchase],
Division 2 [Related Services in Relation to Tangible Personal Property],
Division 4 [Legal Services], and
Division 5 [Telecommunication Services] of Part 5 [Taxes in Relation to Services]

on that purchase.

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Provincial Sales Tax Act, Part 5 - Taxes in Relation to Services

Division 1 — Services Related to Purchase

Section 115 – Definition

PST - SEC.115/Int.

Section 116 – Tax If Contract For Property Conversion Related To Purchase

PST - SEC.116/Int.

Section 117 – Tax if Contract for Modification of Purchased Property

PST - SEC.117/Int.-R.1

R.1 Charges for Alterations of Garments by Clothing Retailers (Issued: 2014/04)

Section 117.1 – Tax If Resulting Property Used For New Purpose

PST - SEC.117.1/Int.

Section 118 – Exempt Property

PST - SEC.118/Int.

Section 118.1 – Refund If Contract For Property Conversion Not Related To Purchase

PST - SEC.118.1/Int.

Division 2 — Related Services in Relation to Tangible Personal Property

Section 119 – Tax On Purchase Of Related Service Provided In British Columbia

PST - SEC.119/Int.

Section 120 – Tax If Related Service Provided Outside British Columbia

PST - SEC.120/Int.

Section 120.1 – Tax If Change Of Use Of Related Service

PST - SEC.120.1/Int.

Section 121 – Exemptions From Tax Under This Division

PST - SEC.121/Int.

Division 3 — Accommodation

Section 122 – Tax On Accommodation

PST - SEC.122/Int.

Section 123 – Tax On Accommodation In Designated Accommodation Area

PST - SEC.123/Int.

Section 123.01 - Transition - Application of Section 123 if Chang in Designation Status of Tax Rate

PST - SEC.123.01/Int.

Section 123.1 – Obligation To Pay And Collect Tax On Accommodation Purchased For Resale

PST - SEC.123.1/Int.

Section 123.2 – Tax If Change In Use Of Accommodation Purchased For Resale

PST - SEC.123.2/Int.

Section 123.3 – Tax If Accommodation Used For New Purpose

PST - SEC.123.3/Int.

Section 124 – Refund In Relation To New Designated Accommodation Area

PST - SEC.124/Int.

Section 124.01 - Refund in Relation to Increase in Tax Rate

PST - SEC.124.01/Int.

Section 124.1 – Payment Into Consolidated Revenue Fund

PST - SEC.124.1/Int.

Section 125 – Payment To Designated Recipient

PST - SEC.125/Int.

Division 4 — Legal Services

Section 126 – Tax If Legal Services Provided In British Columbia

PST - SEC.126/Int.-R.1

R. 1 Tax Court of Canada and the Federal Court Trial Division (Issued: 2014/08)

Section 127 – Tax If Legal Services Provided To British Columbia Resident

PST - SEC.127/Int.

Section 128 – Exemption In Relation To Legal Aid

PST - SEC.128/Int.

Section 129 – Deemed References If Person Providing Legal Services Is Partner Or Employee

PST - SEC.129/Int.

Division 5 — Telecommunication Services

Section 130 – Tax On Telecommunication Service

PST - SEC.130/Int.-R.3

R.1 Internet Cafes (Issued: 2014/04)

R.2 Collocation Services (Issued: 2014/04)

R.3 Teleconferencing And Videoconferencing Services (Issued: 2014/04)

Section 130.1 – Tax On Telecommunication Service Purchased Substantially For Resale

PST - SEC.130.1/Int.

Section 130.2 – Additional Tax On Telecommunication Service Purchased Substantially For Resale

PST - SEC.130.2/Int.

Section 130.3 – Tax On Telecommunication Service If No Longer Substantially For Resale

PST - SEC.130.3/Int.

Section 131 – Tax On Dedicated Telecommunication Service

PST - SEC.131/Int.-R.2

R.1 Examples Of Interjurisdictional Dedicated Telecommunication Services (Issued: 2014/04)

R.2 Dedicated Satellite Or Microwave Networks (Issued: 2014/04)

Section 132 – Calculation If Telecommunication Only Partly Through Dedicated System

PST - SEC.132/Int.-R.1

R.1 Partially Dedicated Calculation Examples (Issued: 2014/04)

Section 132.1 – Tax If Telecommunication Service Used For New Purpose

PST - SEC.132.1/Int.

Section 133 – Tax If Motion Picture Exhibited

PST - SEC.133/Int.

Section 134 – Exemption If Telecommunication Service Purchased For Resale