The results of the BC HST referendum indicate that 54.73% of voters chose to extinguish the HST.
As a result of the referendum, the Province has confirmed that BC will transition back to its former 7% provincial sales tax (the "PST"), and that all permanent PST exemptions will be reinstated. The Province has announced that it may also make certain administrative improvements to streamline the PST.
Finance minister Kevin Falcon stated that the BC government expects the transition to the PST/GST to take a minimum of 18 months, and a firm PST transition date has not yet been determined. The Province has, however, indicated that it will provide quarterly updates on the progress of the transition.
In connection with the reimplementation of the PST, businesses will be required to readjust their accounting and administrative systems accordingly in order to collect, report and remit the PST to the provincial government. New businesses will be required to be registered for PST purposes.
During the transition period, the 12% combined tax rate will continue to apply. The previously proposed HST rate reduction will not proceed as a result of the referendum. Eligible lower-income British Columbians will continue to receive the B.C HST Credit until PST is re-implemented, and thereafter replaced by a PST credit.
The possibility of further changes during the transition period cannot be ruled out at this time.
The foregoing provides only an overview. Readers are cautioned against making any decisions based on this material alone. Rather, a qualified lawyer should be consulted.
© Copyright 2011 McMillan LLP
