On April 1 British Columbia will be reverting back to the old PST system. The government has put considerable time into making sure businesses are prepared for the transition, but what will this mean for consumers?
Do you know what items you are paying HST for, and will soon be PST exempt?
Most consumer items and services will remain the same through the transition, while others , which were previously PST exempt, will be again.
Most household items have been, and will continue to be taxed 12 per cent, however books, magazines, newspapers and certain school supplies are returning to their PST exemption, dropping to five per cent.
Basic groceries (such as dairy, meat, vegetables and canned goods), have always been, and will continue to be 100 per cent tax exempt. Other food, such as snack foods and dine-out meals, which have been charged 12 per cent for the past two years, will return to PST exemption.
Alcohol, on the other hand, will see and increase with the return to the PST. Prior to the HST, there was five per cent GST and 10 per cent PST charged on all alcoholic beverages. With the HST it went down to 12 per cent, and on April 1 it will return to 15 per cent.
Residential energy costs may go down a bit, as electricity and propane will be charged GST only. For the past two years residents have been paying 12 per cent, but may have been eligible for the provincial energy credit or rebate of the seven per cent provincial portion of the HST.
Taxi fares, bicycles, hair cuts, fitness training, massage therapy services, over-the-counter medicines (prescription medications have always, and will continue to be completely tax exempt), vitamins and supplements, feminine hygiene products, veterinary services, wedding planning and funeral services, first aid kits, and smoke detectors are all dropping back down to the five per cent GST.
Cultural and sports lessons will see a big drop. On the old tax system music, dance, gymnastics, and sports lessons were 100 per cent tax free, but have been taxed 12 per cent on the HST system. On April 1 they will be tax free again.
Tobacco products will also experience an adjustment. Cigarettes, cigars and chewing tobacco will return to their PST exemption, however to offset the loss of the provincial portion of the HST, tobacco tax rates will be adjusted to generally keep the overall tax on tobacco constant.
Nicotine replacement products, however, will go down by seven per cent.
To see a complete itemized list of taxable consumer item and services, go to http://www.pstinbc.ca/media/2013_GST_PST_List_WEB_Dec2012.pdf.