Small Business Tips: PST Accounting
PST accounting involves the financial management of ‘Provincial Sales Tax’ and overall financial compliance with business taxes. In the first few years of operating a business, business owners may be audited for compliance. Audits can be intimidating, especially for small businesses that have not set up extensive accounting systems or hired accountants and bookkeepers. While audits are generally conducted on an indiscriminate algorithm, some small businesses may attract regulatory attention based on accounting anomalies or omissions.
If you’re a newly formed corporation or a small business that has been subject to an audit, managing the investigation or request for information from the BC government may hold your company in greater stead for avoiding penalties. Knowing which services attract PST is part of the equation
Generally, your business is subject to PST if you deliver or provide goods and services that will be used in BC.
If your small business offers the following services, your business will need to register for a PST account, unless a specific exemption applies:
- tangible goods such as books, televisions, computer hardware, clothing, vehicles, etc
- services such as writing services, auto services, moving services, consulting services
- apps, cloud-computing software and other software used in BC
If your small business offers the following services, your business will NOT need to register for a PST account:
- your business sells only non-taxable goods such as food for human consumption or children’s clothing
- your business provides non-taxable or exempt services
- your business is a wholesale business
Regardless of the category your business falls into, it’s important to ensure that you clearly understand the rules for PST.
Registering for PST, while time-consuming, is mandatory, particularly if your business offers the services listed above.
The easiest way to register for PST is through BC’s online PST portal known as eTaxBC.
If in doubt at any point in time, seek professional assistance with your account.