B.C. PST COVID-19 Update

In response to the ongoing COVID-19 pandemic, the BC government has declared a state of emergency. The Province has taken several steps to address the challenges that the pandemic presents.[1]

Both filing deadlines and payment deadlines for:

• provincial sales tax,
• employer health tax,
• carbon tax,
• motor fuel tax, and
• tobacco tax

are extended to September 30, 2020. This deferral extends to returns (originally) due March 31, 2020 that includes tax levied in February of 2020. Though not publicly announced, we also understand that, while PST auditors continue to operate remotely, auditors will not be conducting field audits. Moreover, businesses may choose to place their audits on hold.  This will provide some much-needed flexibility to many of the businesses in BC at this critical time.

Some planned changes to BC provincial tax scheme have also been delayed. Carbon Tax increases have been postponed, as has the plan to align the provincial carbon tax rates with the federal carbon pricing backstop. The PST exemption for sweetened carbonated beverages will not be eliminated, and the expanded registration requirements for Canadian sellers of goods, along with Canadian and foreign sellers of software and telecommunication services are postponed until further notice. Given the complexity of these new registration rules, this is a welcome development.

The B.C. Climate Action Tax Credit has been enhanced. Over and above the regular credit amount, the province will be issuing an additional payment in July. The credit will increase in July as planned.

The province has also announced that School Tax rates for commercial properties will be cut in half this year. No changes have been announced for non-commercial properties.

British Columbia is not alone in recognizing the need to provide flexibility to businesses in meeting their tax obligations during these difficult times. Saskatchewan[2] and Manitoba[3] have also announced measures to help businesses meet their provincial sales taxes obligations.

Saskatchewan is extending businesses who are unable to remit their PST due to cash flow concerns relief from penalty and interest charges for three months. Relief may only be granted upon request. Saskatchewan has also suspended audit and compliance activity to provide businesses with more capacity to address other concerns associated with COVID-19.

Manitoba has moved the deadline for April and May returns and remittances to June 22, 2020 for both small and medium businesses with remittances below $10,000 per month. Likewise, quarterly filers that have a due date of April 20, 2020 now can defer filing until June 22, 2020. Such businesses will also neither be assessed a late filing penalty on returns/remittances due in March (for sales tax collected in February), nor will interest be applied until after June 22, 2020.

The federal government has not extended any deferral for GST/HST imposed under the Excise Tax Act. Revenue Quebec has likewise not announced any deferral of QST.

BC’s response to COVID-19 comes as a welcome announcement, especially given the lack of action from the federal government on commodity taxes in response to this emergency. Though the federal government has taken necessary steps with regard to the income tax, it ought to consider following B.C. and Saskatchewan in allowing the deferral of sales taxes.

*This article was co-authored with St.John McCloskey, Thorsteinssons LLP.

[1] https://www2.gov.bc.ca/gov/content/taxes/tax-changes/covid-19-tax-changes

[2] https://www.saskatchewan.ca/government/health-care-administration-and-provider-resources/treatment-procedures-and-guidelines/emerging-public-health-issues/2019-novel-coronavirus/covid-19-information-for-businesses-and-workers/support-for-businesses#saskatchewan-support

[3] https://news.gov.mb.ca/news/index.html?item=47161&posted=2020-03-22

[4] https://www2.gov.bc.ca/gov/content/taxes/tax-changes/covid-19-tax-changes

[5] https://www.gov.mb.ca/finance/taxation/pubs/bulletins/noticerst2003.pdf

[6] https://www.sets.saskatchewan.ca/rptp/wcm/connect/cdc1e058-3a86-421d-bcf4-cb59443873d0/IN+2020-03+Businesses+Impacted+by+COVID-19.pdf?MOD=AJPERES&CACHEID=ROOTWORKSPACE-cdc1e058-3a86-421d-bcf4-cb59443873d0-n3Pgt6N