NORTH and West Vancouver businesses are trudging back to using the provincial sales tax, whether they want to or not.
The province has set a March 31 deadline for businesses to apply for a PST number and change their billing systems to coincide with the date the harmonized sales tax becomes history. Once the transition is complete, B.C. shoppers will be paying a seven-per cent PST and a five-per cent federal Goods and Services Tax to replace the existing 12 per cent HST.
So far, North Shore businesses seem to be on track even though a lot of confusion remains, according to both local chambers
“Most importantly, we’re trying to let all of our members know this is coming, that they need to register and that they need to make sure they understand this may not be exactly the same as it was before. This is completely new legislation,” said Louise Ranger, North Vancouver’s chamber president. “We just want to make sure they’re thinking ahead and not having to be in a panic at the last minute.”
Both chambers have organized transition workshops for their members, which have been well attended, but there are signs that some businesses are dragging their feet close to the deadline, said Gabrielle Loren, West Vancouver’s chamber president and a certified general accountant.
“Right now there’s a lot of confusion out there. We have about 2,500 clients,” she said. “I probably get an email once a day asking ‘Do I have to register? Do I need this number?’”
Despite causing some confusion at the outset, the province has done an exemplary job of helping with the transition by setting up a hotline and dedicating staff to answering business owners’ questions, Loren said.
“They’re being very helpful because they’ve got all these help lines and email contacts and even officers that will come to your business that will tell you if you have to be registered,” she said.
For customers, things will be pretty much business as usual, although they will no longer have to pay the PST portion of taxes on exempt items and services like food, children’s’ clothing and haircuts.
The list of PST-exempt items has been tweaked and the province has left the door open to more changes, something not possible under the old legislation.
“The tax part says ‘Thou shalt charge PST and it’s pretty straightforward but the regulations have all those little rules . . . With those regulations, if enough people in that industry lobby government, they can just change the rules,” Loren said. “There’s a lot more flexibility this time. Those of us in the business community are saying ‘Oh please, put in some rules so that eventually we might get a GST/PST system that might emulate the HST’s good points but not the HST’s bad points.”
During the 2011 referendum on whether to scrap the HST, the North Shore voted very strongly towards keeping the HST, which was surprising given the “little old lady” demographic that lives here, Loren said.
“Those people are actually the ones who the return to GST and PST will actually help,” she said.
While some consumers, especially restaurant-goers, will enjoy the old system, it represents a “numerical nightmare” for the businesses whose bookkeeping tasks just doubled, Loren said.
Under the PST, businesses will also have to pay more tax on their business and office expenses, so Loren is recommending that big-ticket items like computers be purchased by the end of the month.
The sentiment is echoed in North Vancouver’s chamber membership, Ranger added.
“The voters have spoken and we’re changing back and there isn’t anything we can do about it but certainly we’ve heard from the business community that they’re very disappointed,” she said.