British Columbia’s Provincial Sales Tax (PST) and Municipal and Regional District Tax (MRDT) on accommodation have been expanded to include marketplace facilitators.
According to Bulletin PST 142, the new PST rules apply to marketplace facilitators, marketplace sellers, and online marketplace services. The rules became effective on July 1.
Through the revisions, marketplace facilitators must collect PST on taxable sales of goods, software, and services they facilitate through an online marketplace. Moreover, they must also charge PST on online marketplace services they provide to the marketplace sellers.
An online marketplace is a web platform where goods, services, or software are sold, leased, or provided by third-party sellers.
Facilitators who must register to collect and remit PST on facilitated sales include those who enable a seller’s retail sale of accommodation located in B.C., sale of software for use on or with an electronic device in B.C., taxable services to a person in B.C., and more.
Meanwhile, facilitators who are not required to register are those whose gross value of retail sales facilitated/or to facilitate in the previous or next 12 months amounts to CA$10,000 or less, or facilitate only non-taxable or exempt sales.
Registration is also not required if there are two or more marketplace facilitators who jointly operate, own, or control an online marketplace and at least one of the other marketplace
facilitators is registered to collect and remit PST and will collect all PST payable for those taxable sales made through the online marketplace.
“This is good news as it captures online marketplace services that were not collecting and remitting tax on accommodation,” the British Columbia Lodging and Campgrounds Association (BCLCA) said in an email newsletter.
For the campground industry in the Canadian province, it means that beginning July 1, 2022, online accommodation platforms are now referred to as online marketplaces, and new rules apply to them.
For more information, check Bulletin PST 142.