British Columbia is one of the provinces that didn't harmonize its sales tax with the federal GST. That means a BC business deals with two separate sales taxes: the federal GST, and the provincial PST. They have different rules, different registrations, and — this is the part that trips everyone up — different ideas of what's even taxable.

Get GST right and you've handled exactly half of the problem. PST has its own logic, and because it works nothing like GST, applying GST instincts to it is how owners end up either over-charging customers or quietly building an unremitted liability.

TL;DR — The Short Version
  1. PST is a 7% retail sales tax, and it is not GST. Unlike GST, there are no input tax credits — businesses generally pay PST on their own taxable purchases as a real cost.
  2. You must register and collect PST if you sell or lease taxable goods, software, or taxable services in BC in the ordinary course of business. Certain out-of-province sellers must register too.
  3. The "small seller" exemption can excuse you from registering — but it's narrow: broadly, $10,000 or less in gross retail sales over 12 months, with conditions (no established commercial premises, and it doesn't cover things like liquor or vehicles). It is not the same as the $30,000 GST threshold.
  4. The self-assessment trap: if you buy taxable goods, software, or services for use in BC and the seller doesn't charge PST (common with out-of-province and online vendors), you must self-assess and remit the PST yourself.
  5. What's taxable surprises people. PST applies to most goods, software, and some services — but not most services, and many goods are exempt (basic groceries, kids' clothing, bikes). The exemptions and inclusions don't mirror GST.

Read on for who must collect, the small seller rule, what's actually taxable, the self-assessment trap, and a real BC example.

Start Here

PST is not GST — and that's the whole problem

The single most useful thing to understand about BC PST is how differently it behaves from GST.

GST is a value-added tax. You charge it, you claim back the GST you paid on business inputs (input tax credits), and you remit the difference. The tax flows through your business; it isn't really your cost.

PST is a retail sales tax. It's designed to be paid by the final consumer, and there are no input tax credits. When your business buys taxable goods for its own use, the PST you pay is simply a cost. You only avoid PST on purchases in specific situations — most importantly, goods you buy to resell, which you buy exempt by giving the supplier your PST number.

The general PST rate is 7% (some items differ — for example, liquor and certain vehicles have their own rates). PST applies when taxable goods, software, or services are acquired in BC or brought into BC for use here, unless a specific exemption applies.

Source: Provincial Sales Tax Act (SBC 2012, c. 35); BC Ministry of Finance, B.C. provincial sales tax (PST).

Who Collects

Do you have to register and collect PST?

You generally must register for and collect PST if, in the ordinary course of business, you sell or lease taxable goods, sell software, or provide taxable services in BC. This captures most retailers, many service businesses, online sellers shipping into BC, and equipment lessors. Some sellers located outside BC also have to register if they sell into the province above certain thresholds.

The figure below shows the decision most owners actually face.

If you sell taxable goods, software, or taxable services in BC, you must register and collect 7% PST unless you qualify as a small seller. Either way, you generally still pay PST on taxable goods you buy for your own business use. DO YOU HAVE TO REGISTER AND COLLECT PST? Sell/lease taxable goods, software, or taxable services in BC? NO YES No PST to collect — but watch self-assessment A "small seller"? (≤ $10k / 12 mo + conditions) YES NO Exempt from registering — but you pay PST on your inputs Register, collect 7%, file & remit
The core decision. Note that even a small seller — or a business with no taxable sales — generally still pays PST on the taxable goods it buys for its own use.

Source: BC Ministry of Finance, Register to collect PST and Small business guide to PST.

The Threshold That Isn't $30,000

The small seller exemption

This is where GST instincts mislead people. The GST small-supplier threshold is $30,000. The PST small seller threshold is much lower and works differently.

Broadly, you may qualify as a small seller — and be excused from registering and collecting PST — if your gross revenue from retail sales of eligible goods, software, and services is $10,000 or less over a 12-month period. But the exemption comes with conditions, including that you don't have established commercial premises (a store, office, or similar fixed place of business), and it doesn't apply to certain sales such as liquor or vehicles.

Two things to internalize:

What's Taxable

What PST actually applies to

PST doesn't map neatly onto "everything you sell." It applies to specific categories, and notably to fewer services than people expect:

Generally taxableGenerally exempt
Most tangible goods (furniture, electronics, supplies)Basic groceries & restaurant meals (food for human consumption)
SoftwareChildren's clothing and footwear
Accommodation (short-term)Non-motorized bicycles (adult-sized)
Related services to goods (e.g., repairs)Most professional services (consulting, etc.)
Legal services; telecommunication servicesGoods bought for resale (with your PST number)
Leases of taxable goodsMany health/medical products; prescription drugs

The biggest conceptual difference from GST: most services are not subject to PST. A consultant or marketing agency in BC generally doesn't charge PST on their fees (though they likely charge GST). But a business that repairs goods, or sells software, or provides legal or telecom services, is in PST territory. Always check your specific category — this is exactly where assumptions cost money.

Source: BC Ministry of Finance, PST exemptions; Provincial Sales Tax Act (taxable transactions and exemptions). Specific rates apply to some items (e.g., liquor, vehicles).

The Sneaky Part

Self-assessment: the PST nobody charged you

Here's the rule that creates more unexpected assessments than any other. If you acquire taxable goods, software, or services for use in BC and the seller doesn't charge you PST, you are required to self-assess — calculate the PST yourself and remit it directly to the province.

This happens constantly in the real world:

In each case, the absence of PST on the invoice doesn't mean no PST is owed — it means the obligation shifted to you. Registered businesses self-assess on their PST return; others can remit using a casual remittance. Skipping it is one of the most common findings when the province reviews a BC business.

Source: BC Ministry of Finance, Reporting and paying PST (self-assessment); Provincial Sales Tax Act.

A Real-World Example

How it sneaks up on a BC small business

Meet Priya, who runs Larch & Linen, a home-goods business out of Kelowna. She makes candles and small décor, sells them through her own website, and does the busy summer farmers'-market circuit across the Okanagan. Her first full year, she clears about $46,000 in sales. She registered for GST when she crossed $30,000 and dutifully charges 5% GST on everything. As far as Priya is concerned, sales tax is handled.

It isn't. Three things are quietly going wrong.

1. She blew past the small seller line and never noticed. Priya assumed the $30,000 figure she'd heard about covered "sales tax." But that's the GST number. For PST, the small seller threshold is $10,000 — and she passed it in her first few months. Her candles and décor are taxable goods, sold retail in BC. She should have registered to collect PST and been charging 7% PST on top of her GST. She hasn't charged a cent of it.

"I charge GST, so I'm covered" is the single most expensive assumption a BC seller can make.

2. She self-assessed nothing on her US purchases. In the spring, Priya bought a $1,400 label printer and a batch of packaging supplies from an American supplier online. No PST appeared on the invoice — the vendor doesn't collect BC tax. Priya treated it as PST-free. In fact, those are taxable goods brought into BC for use in her business, so she owed roughly $98 of self-assessed PST on the printer alone, plus PST on the supplies. It never got recorded.

3. She over-thought one thing she had right. Priya also does occasional paid styling consultations. She'd been agonizing over whether to charge PST on those. As it happens, that kind of standalone professional service generally isn't PST-taxable — so the one area she worried about was fine, while the two areas she ignored were the real exposure.

By the time Priya sits down to sort it out, she has two problems with very different shapes. The uncollected PST on her sales is the scary one: she can't realistically go back to a year of market customers to collect 7% after the fact, so it may come out of her own margin. The self-assessed PST on her purchases is smaller and simpler — she just owes it. Neither would have happened if someone had told her, on day one, that PST is a second, separate tax with a $10,000 line.

The danger with PST isn't complexity. It's that nobody tells you it exists until you've already missed it.

What should have happened

Before You Sell

A practical checklist

PST is exactly the kind of thing that's invisible until it's a problem — and a bookkeeper who knows BC's rules will flag the small seller line, the self-assessment, and the taxable/exempt question before they become an assessment. That's part of what's included in every CDL plan, and you can estimate the cost in about a minute.

The Bottom Line

Two taxes, not one

The mental model that saves BC business owners is simple: you have two sales taxes, and PST is the one that behaves nothing like the other. It has a lower registration threshold, no input tax credits, a different list of what's taxable, and a self-assessment rule that quietly shifts the obligation onto you when a seller doesn't charge it. None of it is hard once you know it's there — the whole risk is not knowing it's there.

If you sell into BC and you've only ever thought about GST, that's the gap worth closing now.

Selling in BC and not sure your PST is handled?

It's the tax people don't know they're missing until it's a bill. A 20-minute call is usually enough to tell whether you should be registered — and what you might be self-assessing.

Book a Free 20-Minute Call

This article is for informational purposes only and does not constitute tax advice. BC PST rules, rates, thresholds, and exemptions are detailed and change over time, and specific rates apply to certain items. Consult a qualified professional or the BC Ministry of Finance before deciding how PST applies to your business.

References

Primary sources, linked so you can read and interpret them yourself. Legislative links open on the official BC Laws website; agency links open on the Province of British Columbia website.