There is no harmonized sales tax in British Columbia. Voters repealed the province’s short-lived HST in a 2011 referendum, and on April 1, 2013, BC returned to charging two separate taxes on most purchases: the 5 percent federal Goods and Services Tax (GST) and the 7 percent Provincial Sales Tax (PST). Most things you buy in the province carry a combined 12 percent tax, but the two taxes are administered by different governments and follow different rules.
Why BC Dropped the HST
British Columbia briefly merged the federal GST and provincial PST into a single 12 percent HST. The change was controversial, and the province held a mail-in referendum from June 13 through August 5, 2011. Roughly 54.7 percent of voters chose to extinguish the HST.1Elections BC. Report of the Chief Electoral Officer on the 2011 HST Referendum Because the result was binding, BC transitioned back to GST plus PST on April 1, 2013, under the Provincial Sales Tax Act.2British Columbia Laws. British Columbia Code SBC 2012 Chapter 35 – Provincial Sales Tax Act
What You Pay Now Instead
The federal GST of 5 percent applies to most goods and services sold in BC and is collected on behalf of the Canada Revenue Agency.3Canada Revenue Agency. Charge and Collect the GST/HST The provincial PST is a separate 7 percent tax on most goods and certain services, administered by the BC Ministry of Finance.4Province of British Columbia. Provincial Sales Tax The two are not linked in any administrative way. Different account numbers, different filing schedules, different return forms.
PST is calculated on the selling price before GST is added. On a $100 item, you pay $7 PST and $5 GST, for a total of $112. If a seller displays GST-inclusive pricing, the PST is calculated using an adjusted factor of 6.67 percent, which is the mathematical equivalent of applying 7 percent to the pre-GST price.5Province of British Columbia. Small Business Guide to PST
PST applies broadly to tangible personal property purchased or used in BC: electronics, furniture, appliances, motor vehicles. Software is included whether you download it or buy a physical disc.6Province of British Columbia. Software Telecommunication services such as phone and internet access are also taxed. The Act taxes services selectively rather than across the board, so sellers of a particular service need to check whether theirs falls within the PST net. Legal services provided in BC, or provided outside BC on BC matters such as provincial real property or court proceedings, are taxed at the standard 7 percent.
When the Rate Is Higher Than 12 Percent
Three categories carry PST rates well above the standard 7 percent.
Passenger Vehicles
The PST on a vehicle bought from a dealer depends on price, and the escalation is steep:7Government of British Columbia. Provincial Sales Tax Bulletin – Vehicles
- Under $55,000: 7%
- $55,000 to $55,999.99: 8%
- $56,000 to $56,999.99: 9%
- $57,000 to $124,999.99: 10%
- $125,000 to $149,999.99: 15%
- $150,000 and over: 20%
Private sales are charged a flat 12 percent on vehicles under $125,000, then 15 and 20 percent at the upper thresholds. Zero-emission vehicles get a break: the escalation starts at $75,000 instead of $55,000, though ZEVs above $125,000 face the same high rates. The ZEV thresholds are scheduled to revert to the standard tiers after February 22, 2027.7Government of British Columbia. Provincial Sales Tax Bulletin – Vehicles
Liquor
Any beverage with an alcohol content above 1 percent is taxed at 10 percent PST rather than 7. That covers beer, wine, spirits, ciders, coolers, and mixed drinks.8Ministry of Finance. Grocery and Drug Stores Restaurants charge 10 percent on the alcohol portion of a bill even though the food is exempt.
Short-Term Accommodation
Hotels, motels, vacation rentals, and bed-and-breakfasts are subject to 8 percent PST, one point above the standard rate. Many municipalities and regional districts add a Municipal and Regional District Tax (MRDT) of up to 3 percent, collected on the same return. Vancouver imposes an additional 2.5 percent Major Events MRDT through January 2030. A hotel guest in Vancouver can therefore face 8 percent PST, 3 percent MRDT, 2.5 percent Major Events MRDT, and 5 percent GST on the same booking.9Province of British Columbia. Accommodation
What’s Exempt From PST
Several categories of everyday purchases carry no PST at all, and most require no special paperwork:10Province of British Columbia. PST Exemptions
- Food for human consumption. Basic groceries, restaurant meals, takeout, snack foods, and candy are all exempt. Soda beverages are the notable exception at 7 percent, and alcoholic drinks are taxed at 10 percent.8Ministry of Finance. Grocery and Drug Stores
- Prescription medications and household medical aids, including pain relievers, cough syrups, and similar over-the-counter products.
- Children’s clothing and footwear. Children-sized items are automatically exempt. Adult-sized clothing or footwear bought for a child under 15 requires the buyer to sign a Certificate of Exemption (Form FIN 425).11Government of British Columbia. Certificate of Exemption – Children’s Clothing and Footwear
- Books, newspapers, and magazines in print form.
The food exemption is broader than in many other provinces. Prepared meals from restaurants, food trucks, and takeout counters escape PST entirely. You only pay tax on the drink if it is a soda or contains alcohol.
What This Means If You Run a Business
If you sell taxable goods or services in BC, you generally have to register with the Ministry of Finance and collect PST. A small-seller exception applies: businesses in BC with $10,000 or less in gross taxable sales over the past 12 months, and no more than $10,000 expected in the next 12, are not required to register.12Government of British Columbia. PST 001 Registering to Collect PST
The same $10,000 threshold applies to sellers located outside BC, whether elsewhere in Canada or abroad. Out-of-province sellers who make retail sales of goods, or provide software and telecommunication services to BC customers, must register once they cross the threshold. Online marketplace facilitators like Amazon have been required to register and collect PST on BC sales since July 1, 2022.12Government of British Columbia. PST 001 Registering to Collect PST
The separation of GST and PST matters most when you buy from a supplier who does not charge BC PST. You owe the tax yourself on taxable goods or services as soon as you start using them in BC. This comes up constantly with out-of-province suppliers, international vendors, and cloud-based software subscriptions. Registered businesses report the self-assessed tax on their next PST return; unregistered businesses pay the Ministry of Finance directly.13Province of British Columbia. Reporting and Paying PST
Registered businesses file through eTaxBC, the Ministry of Finance’s online portal.14Province of British Columbia. Report and Pay PST Using eTaxBC Returns and payments are due by the last day of the month following each reporting period, and filing on time earns a commission of up to $198 per period, calculated on the return itself.13Province of British Columbia. Reporting and Paying PST The commission is forfeited entirely if the return or payment is even one day late, and late penalties and interest apply on top.15Government of British Columbia. CTB 005, Penalties and Interest GST is remitted separately to the Canada Revenue Agency on its own schedule.