PST Remittance Guide for Small Businesses in BC

Updated November 24, 2025

Nearly all businesses in BC that sell taxable goods, software, or certain services are required to collect, report, and remit provincial sales tax (PST). But figuring out when PST actually applies, how to track it properly, and how often to file can feel overwhelming – especially if you’re a small business or independent contractor.

This guide walks through the basics of PST reporting obligations, using a home-renovation contractor as an example, and shows how to track and remit PST efficiently (with a few nuances we see small businesses get wrong all the time).

Who Needs to Remit PST in BC?

In British Columbia, you generally need to register, collect, and remit PST if you:

• Sell or lease taxable goods in BC
• Sell or license taxable software or digital products
• Provide certain taxable services (legal services, telecommunications, short-term accommodation, and “related services” like repairs to taxable goods)

If you’re required to register, you must:

• Collect PST on taxable sales
• Remit all PST you charged plus any PST you owe on your own purchases (self-assessed PST)

When you may not need a PST account

You may not need to register for PST if:

• You are a “small seller” (typically ≤ $10,000 in gross revenue from eligible taxable goods/software/services, and you don’t sell from an established commercial premises), and
• You don’t otherwise provide taxable services (legal, telecom, accommodation, etc.), and
• You only sell exempt items (e.g., basic groceries) or non-taxable services (e.g., pure bookkeeping/consulting with no sale of taxable goods)

In that case, you’ll still pay PST on your own purchases, but you may not need to charge PST to customers or file PST returns.

If you’re unsure whether you’re a small seller or service-only business, that’s a good time to get professional advice.

Taxable Goods

“Goods” refers to tangible personal property – physical items that can be seen, touched, or moved.

In BC, the general rule is that most goods are taxable unless a specific exemption applies.

• Examples of taxable goods
  Furniture, appliances, electronics, building materials (flooring, lumber, tile), office supplies, most tools and equipment
• Examples of exempt goods
  Basic groceries, prescription drugs, children’s clothing and footwear, certain medical devices

Taxable Services (and GST-only services)

Not all services in BC are taxable for PST purposes. BC only taxes certain specific service categories:

• Legal services
• Telecommunication services (phone, internet, many streaming services)
• Short-term accommodation (e.g., hotels, short-term rentals)
• Software-related services and “related services” to taxable goods (repairs, maintenance, etc., in many cases)

Most other professional or consulting services are not subject to PST and only charge 5% GST. Common GST-only service examples:

• Accounting and bookkeeping services
• Payroll processing and tax prep
• Management consulting and coaching
• Many educational and training services
• Medical and health-care services (often GST-exempt as well, depending on the provider)

Quick taxable vs exempt examples

Goods

• PST applies: Furniture, flooring, office supplies, tools, most equipment
• No PST charged: Basic groceries, prescription drugs, kids’ clothes

Services

• PST applies: Legal advice, telecom bills, many repair/maintenance services on taxable goods
• No PST charged: Accounting/bookkeeping services, most consulting services, labour to install goods into real property (where the contractor has already paid PST on the materials), most educational and medical services

Software & digital

• PST applies: Off-the-shelf software, many SaaS subscriptions, software licences, upgrades, most software “maintenance” fees
• Often exempt: Truly custom software developed solely for one client where the customer acquires a unique solution (specific conditions apply)

Accommodation

• PST applies: Hotel stays and short-term rentals in BC
• No PST charged: Long-term residential rental (e.g., lease of an apartment)

The Intent of PST

PST is meant to be a retail tax paid by the final consumer, not a cascading tax charged at every step in the supply chain.

Practically, this means:

• Businesses buying goods for resale generally don’t pay PST at the time of purchase (if they provide proper documentation).
• Businesses buying goods for their own use (office supplies, laptops, tools, shop consumables) do pay PST, and it’s a cost – there’s no PST “input tax credit” like there is for GST.
• Manufacturers and contractors sit in the middle and have extra rules and exemptions to pay attention to.

Manufacturing Inputs & Production Equipment

For manufacturers and some processors, PST treatment breaks down into two main buckets:

1. Goods incorporated into goods for resale
   Raw materials and components that end up in the finished product (lumber, hardware, cans, labels, etc.) are generally PST-exempt if they are obtained solely for resale/lease or for incorporation into goods for resale.
   You typically claim this at purchase by giving your PST registration number, or if you’re not registered but qualify, a completed FIN 490 – Certificate of Exemption (General).

2. Production Machinery & Equipment (PM&E)
   Many types of machinery and equipment used primarily to manufacture goods for sale can be PST-exempt if you provide a FIN 492 – Certificate of Exemption – Production Machinery and Equipment (or an acceptable alternative certificate).
   This is a separate exemption from resale and has its own rules, so it’s worth checking the PM&E bulletin or asking your accountant.

Items that don’t qualify (office computers, general shop tools, office furniture, safety gear, etc.) are usually PST-taxable, even for manufacturers.

Resale Documentation & “PST Exemption Letters”

To avoid PST at the time of purchase for resale items, businesses must provide proper exemption documentation to their vendors.

In BC, this usually means:

1. PST-registered businesses
   Provide your PST registration number at or before the time of sale.
   The vendor records your PST number as their support for selling the goods without charging PST.

2. Businesses that qualify for an exemption but are not PST-registered
   Use FIN 490 – Certificate of Exemption (General) for goods you obtain solely for resale/lease or for incorporation into goods for resale.

3. Production Machinery & Equipment
   Use FIN 492 – Certificate of Exemption – Production Machinery and Equipment (or your own equivalent form that contains all the required information).

What is a “PST exemption letter”?

Many businesses (including ours) create an internal PST exemption letter template that:

• States that the business is registered to collect BC PST
• Includes the PST registration number
• Confirms that the goods being purchased are for resale or for another specific exemption (e.g., PM&E)
• Cites the applicable bulletin or FIN form, where appropriate

This letter is not a government-issued certificate, but it’s often the easiest way to give larger vendors everything they need in a single document.

Important: Using an exemption at purchase does not remove your obligation to charge PST to your end customer when you resell taxable goods. It simply shifts where in the chain PST is charged.

Example – Flooring Contractor in BC

Let’s take a look at a flooring contractor example with the real-world PST rules in mind.

1. Retail sale of flooring only (no install)
   You buy flooring from a supplier using your PST number (no PST at purchase – goods for resale).
   You sell the flooring to a homeowner and charge PST on the sale price of the flooring (plus GST).
   Your invoice might show:

   • Flooring: $5,000
   • PST (7%): $350
   • GST (5%): $267.50

2. Supply-and-install contract (real property contractor)
   You buy flooring from a supplier and pay PST on the materials (you are treated as the final consumer).
   You invoice the customer “Supply and install flooring – $10,000” (plus GST only).
   You generally do not show PST separately to the customer because you paid it on the materials.
   In this model, the contract price you charge the customer is a PST-inclusive price on the materials portion.

3. Supply-and-install using resale on materials
   Less common, but possible: you buy flooring without PST (using your PST number) and then itemize materials vs labour on the customer invoice, charging PST only on the materials line:

   • Materials: $8,000
   • PST (7% on $8,000): $560
   • Labour: $2,000 (no PST)

   This approach has to be clearly reflected in the contract and invoice; you now act as a retailer of the flooring and a separate service provider for labour.

Contracts matter. You should decide and document before work begins how PST will be handled (contractor pays PST vs customer pays PST on materials) and ensure your invoices match that structure.

Self-Reporting (Self-Assessing) PST

If PST wasn’t charged on a taxable purchase – or if you use goods in a way that triggers PST – you often have to self-assess it.

Common scenarios:

• Goods bought from out-of-province or foreign suppliers that ship into BC with no PST charged
• Online software or digital tools where GST is charged but PST is missing, and the product is taxable for PST purposes
• Equipment or supplies brought into BC for use in your business
• Inventory or leased goods that you later take into own business or personal use (change in use)

If you’re registered for PST, you generally:

• Calculate the PST owing; and
• Report it on your next PST return in eTaxBC, alongside the PST you collected from customers.

If you’re not registered but still owe PST on a one-off purchase (for example, taxable legal services bought outside BC that relate to BC), you can usually self-assess using FIN 405 – Casual Remittance Return.

Rewards for On-Time Filing

BC offers a small commission to registered businesses that file and pay their PST on time.

• The commission is calculated on each return, up to a maximum of $198 per reporting period.
• It’s essentially a small rebate to help offset the admin cost of collecting PST on behalf of the province.

You’ll see the commission calculated automatically on your FIN 400 / eTaxBC return if you’re eligible.

How Often Do You File PST?

Your PST reporting period (monthly, quarterly, semi-annual, or annual) is assigned when you register and is based on the amount of PST you collect (and regularly self-assess) per year.

Current general rules:

• More than $12,000 PST/year → Monthly only
• More than $6,000 up to $12,000 → Monthly or quarterly
• More than $3,000 up to $6,000 → Quarterly or semi-annual
• $3,000 or less → Quarterly, semi-annual or annual

You must file and pay by the last day of the month following the end of your reporting period (e.g., PST for June must be reported and paid by July 31).

If your PST collected/self-assessed changes significantly, the Ministry can adjust your reporting period.

Tracking PST in QuickBooks Online (QBO)

If you use QuickBooks Online, it can do a lot of the heavy lifting – but only if it’s set up properly.

At a high level:

1. Set up the correct PST tax codes under Taxes → Sales tax

   • A code for GST only (5%)
   • A code for GST + PST on taxable goods (and possibly a variant for software, depending on how granular you want to be)
   • A code for GST only on PST-exempt services

2. Assign the right default tax code to each product/service item

   • “Flooring – materials”: GST + PST
   • “Installation labour”: GST only
   • “Bookkeeping services”: GST only
   • “Basic groceries” (if you’re a food producer): often GST-exempt & PST-exempt

3. Code purchases correctly
   Use separate accounts for inventory for resale, PM&E, and general expenses, and make sure you record PST on your own taxable purchases where it applies.

4. Use QBO’s sales tax reports
   In the Sales Tax Centre, review the BC PST section to see:

   • PST collected on sales
   • Adjustments and credits

   This report is usually your starting point for filling out the PST return in eTaxBC.

How to Remit PST in BC (Process)

When you’re ready to file:

1. Log in to eTaxBC.
2. Select the reporting period that’s due.
3. Enter:
   • PST collected on taxable sales; and
   • PST you’re self-assessing on your own purchases (if any).
4. Confirm the calculated commission, if applicable.
5. Submit the return and pay via eTaxBC or your online banking.
6. Save or download your confirmation for your records (and for your accountant).

Conclusion & Call to Action

PST in BC isn’t just “7% on everything.” Between small-seller rules, non-PST services, manufacturing exemptions, resale documentation, and self-assessment, it’s very easy for small businesses to either overpay or under-collect PST without realizing it.

At Agate Bay Bookkeeping, we help business owners across BC:

• Determine whether they actually need a PST account
• Set up QBO correctly for GST/PST
• Structure contracts (especially for contractors and manufacturers) so PST is handled cleanly
• Track and remit PST on time – and capture the on-time filing commission where available

If you’d like a second set of eyes on your PST setup – or help fixing legacy issues – reach out to us anytime and we’ll walk through your situation in plain language.