Provincial Sales Tax Rules: When PST Applies to Your Business
Canada's sales tax landscape is a patchwork. Alberta and the three territories charge GST only, five provinces use a harmonized HST, Quebec charges GST plus QST, and three provinces (British Columbia, Saskatchewan, and Manitoba) charge GST plus a separate Provincial Sales Tax. If your business operates in or sells into a PST province, you need to understand when PST applies, when you're exempt, and how registration works.
The Canadian Sales Tax Map
Before diving into PST specifics, here's how each province handles sales tax in 2025/2026:
| Province | Tax Type | GST Rate | PST/HST Rate | Total Rate |
|---|---|---|---|---|
| Alberta | GST only | 5% | 0% | 5% |
| British Columbia | GST + PST | 5% | 7% PST | 12% |
| Saskatchewan | GST + PST | 5% | 6% PST | 11% |
| Manitoba | GST + RST | 5% | 7% RST | 12% |
| Ontario | HST | n/a | n/a | 13% |
| Nova Scotia | HST | n/a | n/a | 14% |
| New Brunswick | HST | n/a | n/a | 15% |
| Newfoundland & Labrador | HST | n/a | n/a | 15% |
| PEI | HST | n/a | n/a | 15% |
| Quebec | GST + QST | 5% | 9.975% QST | 14.975% |
Manitoba calls theirs "Retail Sales Tax" (RST), but it functions the same as PST. Quebec's QST is administered separately by Revenu Quebec and has its own rules, which we won't cover in detail here.
BC Provincial Sales Tax (7%)
BC PST is the one most relevant to corporations based in British Columbia. Here's what you need to know.
What's Taxable
BC PST applies to:
- Purchase or lease of new and used goods in BC
- Software (including SaaS, with some exceptions)
- Telecommunication services used in BC
- Legal services (as of April 2013)
- Accommodation under 27 consecutive days
What's Exempt for Service Businesses
Most professional services are exempt from BC PST. This is the big relief for consultants, developers, designers, and other service providers:
- Management consulting
- Accounting and bookkeeping services
- Marketing and advertising services
- Web development services (custom, for a specific client)
- Engineering and architectural services
When You Must Register
You must register for BC PST if you:
- Sell or lease taxable goods in BC
- Provide taxable services in BC (e.g., legal services, telecom)
- Are an out-of-province seller making more than $10,000 in taxable sales to BC customers in a 12-month period
There is no revenue threshold for BC-based businesses selling taxable goods. If you sell even one taxable item, you must register and collect PST.
How to Register
Register online through the BC government's eTaxBC portal. Registration is free and typically processed within 5 business days. You'll receive a PST number that goes on your invoices.
Comparing PST Across Provinces
| BC PST (7%) | Saskatchewan PST (6%) | Manitoba RST (7%) |
|---|---|---|
| Most professional services exempt | Most professional services exempt | Most professional services exempt |
| Legal services taxable | Legal services exempt | Legal services exempt |
| SaaS/cloud software generally taxable | SaaS taxable if used in SK | Software taxable (including SaaS) |
| No small seller exemption for BC businesses | Must register if selling taxable goods/services in SK | Must register if selling taxable goods/services in MB |
| Filed monthly or quarterly via eTaxBC | Filed monthly via Saskatchewan eTax | Filed monthly or quarterly via TAXcess |
| Self-assessment required on out-of-province purchases | Self-assessment required on out-of-province purchases | Self-assessment required on out-of-province purchases |
The Self-Assessment Trap
All three PST provinces require you to self-assess PST on goods and some services purchased from out-of-province sellers who didn't charge PST. This catches many business owners off guard.
Example: You're a BC corporation and you buy a $2,000 standing desk from an Alberta-based online retailer. They charge 5% GST but no PST (Alberta has no PST). You are legally required to self-assess and remit 7% BC PST ($140) on that purchase.
| Scenario | GST Charged by Seller | PST Charged by Seller | Your Obligation |
|---|---|---|---|
| Buy goods from BC seller | Yes (5%) | Yes (7%) | None, PST already collected |
| Buy goods from Alberta seller | Yes (5%) | No | Self-assess 7% BC PST |
| Buy goods from Ontario seller | HST included (13%) | No | Self-assess 7% BC PST |
| Buy exempt services from any province | Yes (5%) | n/a | No PST obligation |
PST on Technology and Software
This is where it gets complicated for tech businesses. The treatment of software varies significantly.
BC: Canned software (off-the-shelf) is taxable. SaaS and cloud-based software delivered electronically are generally taxable as of April 2013. Custom software developed for a specific client may be exempt if the work is primarily a service.
Saskatchewan: Software delivered electronically is taxable. SaaS is considered a taxable purchase of software. Custom software is also taxable.
Manitoba: All software is taxable, whether canned, custom, or SaaS. Manitoba has the broadest definition.
| Software Type | BC PST | SK PST | MB RST |
|---|---|---|---|
| Canned/off-the-shelf | Taxable | Taxable | Taxable |
| SaaS / cloud software | Generally taxable | Taxable | Taxable |
| Custom software (for specific client) | May be exempt | Taxable | Taxable |
Filing and Remitting PST
PST is filed and remitted to the provincial government, not CRA. Each province has its own portal:
- BC: eTaxBC (online filing, monthly or quarterly depending on volume)
- Saskatchewan: Saskatchewan eTax (monthly filing)
- Manitoba: TAXcess (monthly or quarterly)
Unlike GST/HST, there are no Input Tax Credits for PST. PST is a final tax. If your business pays PST on purchases, that cost is simply a business expense. You cannot recover it.
How ledg Helps
ledg automatically separates GST and PST on your transactions, flags purchases that may require PST self-assessment, and calculates your PST liability for each filing period. No more guessing which purchases need self-assessed PST.
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