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PST and GST return April 1

Time running out for B.C. businesses to register for provincial tax number
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Change is coming – some good and some bad.

With the switch back to the Provincial Sales Tax/Goods and Services Tax April 1 from the Harmonized Sales Tax cyclists will get a break — saving about $35 on a $500 bike — but beer drinkers won't — the cost of their suds will stay about the same.

Most businesses in Whistler have been gearing up for the change for some time.

Sandy Black's Affinity Sports is ready for the return from the current harmonized system (HST) to the old two-tax system (PST and GST) on the purchase of most goods and services.

Black said it wasn't a big deal to make the change across the five businesses he registered with the Ministry of Finance.

"For us there's no net-change to the end price to the consumer," said the sports store operator. "For rental equipment our total price remains the same so there's no real impact on the guest, which is good."

Black and his team just needs to reprogram the in-store cash registers, and the online systems need to be updated on April 1.

"I was on it early," said Black. "I registered months and months ago."

But not everyone is as well prepared as Black and business leaders are concerned for those who put off registering their company with the ministry.

Fiona Famulak, president of the Whistler Chamber of Commerce, is urging Whistler business owners and managers who haven't made plans for the change to do so as soon as possible.

"Given the importance of tax systems to a business's overall operations and its customer experience, it is imperative that Whistler businesses are ready for the transition to GST/PST when it occurs in less than one week's time," said Famulak. "We therefore urge all business owners, if they haven't already done so, to register now so the upcoming transition is a smooth one."

Canadian Federation of Business B.C.'s director of provincial affairs, Mike Klassen, said his organization has been in contact with many of its members.

"The vast majority of them have already registered," Klassen said. "The fact that every business has not registered for the PST yet is concerning, however."

John Winter, the president and CEO of the BC Chamber of Commerce said the PST transition seminars held in Whistler, Pemberton, Squamish and other communities across the province were successful.

"But we know that there are still many businesses that have not registered," said Winter.

Not just retail is affected by the change.

Pat Kelly, the owner and president of the Whistler Real Estate Company, said he has heard of a few cases of people holding off on real estate purchases until after April 1 because of potential savings due to the change. But, he added, he isn't expecting an artificial inflation on the market in the first week of April.

"Most of our market is resale so it is not currently being impacted by GST," said Kelly. "The number of purchases that would actually be concerned with GST or HST as an issue in the transaction are pretty small, probably just land sales primarily from developers in just a couple of places and the odd new home that has been built and come up for sale."

Ann Chiasson of Re/Max Sea to Sky Real Estate noted that the transition isn't a simple one for those who build new homes.

"Things that were HST-able and had input tax credits won't be anymore and actually will have PST, so it is a little more complex," said Chiasson.

She noted that it has been a challenge to explain the issues to real estate customers. A transitional process is being implemented for houses that were started before the changeover.

Details of that issue were explored in a seminar held in Whistler on Tuesday with an expert from the Canada Revenue Agency.

"In an HST world, construction was actually cheaper," Chiasson said in getting to the bottom line of the change for those in real estate and new homebuilders.

The complexity of the transition for any given sector doesn't erase the fact that businesses need to take steps to prepare for the tax change.

British Columbians rejected the HST through a referendum on the unpopular tax in 2011.

The BC Liberal government, under the leadership of then Premier Gordon Campbell, surprised provincial voters after the 2009 election by announcing the introduction of the tax after indicating through the election that a transition to HST wasn't being considered.

On April 1 the 12 per cent HST will no longer be collected and it will be replaced by a seven per cent PST on most goods and services along with a federal GST of five per cent.

As chamber of commerce organizations across the province lobby businesses to get registered, the B.C. minister of state for small business is also encouraging business owners and operators who haven't applied yet for a PST number to get it done.

"April 1st is almost here, and we don't want small business operators waiting until the last moment," said Naomi Yamamoto through a news release. "They need to register as soon as possible – preferably by going online today."

According to the minister, registering is quick and easy. The province has offered and continues to provide webinars and seminars to help businesses get up to speed.

The conversion to the new tax system is expected to cost the province $3 billion.

PST Exemptions

• Food for human consumption (basic groceries and restaurant meals)

• Books, newspapers and magazines

• Children's clothing

• Bicycles

• Prescription medications and household medical aids such as cough syrup and pain medications

These exemptions are available to all purchasers. Purchasers don't need to do anything to get the exemption.

Web resources:

Provincial government: www.gov.bc.ca/pst; Federal government: www.cra-arc.gc.ca; BC Chamber of Commerce: www.bcchamber.org/pst_transition.html.