There are many great resources out there to help business owners in BC understand the transition of the tax system from HST to PST/GST. One of the most useful websites I have found is: www.pstinbc.com. This site provides an abundance of constantly updated information. While some taxable goods will benefit from a reduction (i.e. restaurant meal purchases) other tax incentives to businesses will be lost. Those losses are the reason for this article and have been explained below.
On April 1, 2013 British Columbia is reverting to the PST/GST tax system; no joke! If your organization is considering new business technology hardware or software you have until March 31st to get your order processed! Make sure to talk to your accountant to verify your organization’s eligibility.
What is happening?
HST provides businesses with an input tax credit; effectively eliminating any tax costs on technology hardware or software purchased by a business for business purposes. With the loss of HST, this input tax credit will be reduced to only cover GST at 5%. This suggests, that all other variables the same, businesses will be required to pay the extra 7% PST on any purchases moving forward.
With this information in mind, think about how much your organization spends on hardware and software in a given lifecycle – this is typically 3 -5 years for the average organization – now add 7% to that cost!
What should I do about it?
If you are close to making an IT upgrade decision, and want to make sure you are making the right decision, give the Sea to Sky team a call; we would be happy to help your organization build a solution that will allow you to maximize your IT dollars; as long as you order before the change to PST.
If you have questions about the change to PST in BC, talk to your accountant, or visit www.pstinbc.com. If you have questions about upgrading or maintaining your IT systems, talk to us; we are happy to help. Inquiries can be made to 604.628.6970 or email firstname.lastname@example.org.
– Sea to Sky Team
Article Disclaimer: as outlined above, Sea to Sky is not an accounting firm, but we do like to stay on top of the latest changes in policy that could adversely affect our clients. If you haven’t already, get the tax conversation going with your accountant, then give our team a call to see how we can help your company become more productive.