PST Rule on Sales to BC & Federal Governments

Source: (under FAQs - Sales and leases to the provincial and federal governments) – March 19/13

Vendors to the B.C. Government

What will the return of the PST mean for businesses that sell goods and services to the B.C. government?

Since the introduction of the 12% HST in July 2010, the provincial government and its Crown agents pay HST when purchasing taxable goods and services from vendors. It's the government's intent that when the PST and GST system is re-implemented on April 1, 2013, the provincial government and its Crown agents will continue to pay the 5% GST.

These entities will also pay the PST on their taxable purchases, as they did under the previous PST system.

Under this approach, the provincial government and its Crown agents can continue to be treated by vendors just like other private sector purchasers. This will simplify administration of the sales tax system for B.C. businesses that sell goods and services to the Province.

Vendors to the Federal Government

Will the federal government pay B.C.'s PST when it buys taxable goods and services from vendors?

Generally, federal government departments will be exempt from paying PST. It's expected that federal government departments will claim the exemption in the same way as prior to July 2010, by using either a PST exemption certificate or, in the case of departments that are registered for PST, their new PST registration number. Federal government departments often refer to the PST registration number as the "exemption number".

More details will be available from the federal government in the coming months. For more information, contact Canada Revenue Agency at 1-800-959-5525.