Following up on the results of the 2011 referendum, BC is returning to a new/old Provincial Sales Tax on April 2, 2013. Most economists think a Harmonized Sales Tax (or Value Added Tax) is better policy, but the people have spoken, so the combined 12% HST will split into a 5% GST on almost everything, and a 7% PST on some things.
The Finance Department has tried to simplify the legislation while maintaining the spirit of the old system with its many exemptions and special rules.
How does this affect energy ? In general, the following will be exempt:
- energy delivered for residential or farm use **
- hardware for renewable energy generation systems (wind, photovoltaic, solar thermal, tidal, microhydro up to 150 KW, etc.) and wiring, inverters, etc. Batteries are not specifically mentioned ***
- specified materials for energy conservation (insulation batts, weather stripping, caulking, etc.)
- kits to convert vehicles to propane, natural gas, or electricity
- penstock and diversion equipment for hydro-electricity
- bicycles, and accessories purchased at the same time
** energy other than electricity is subject to a 0.4% tax to raise revenue for the Innovative Clean Energy fund
Exemptions for Energy Star rated windows, refrigerators, freezers and clothes washers expired in 2010, so all are subject to the new PST.
BC's Revenue Neutral Carbon Tax will continue at $30.00 / tonne of carbon dioxide.
BC Government links:
- The intro page on the PST is here.
- A comprehensive list is here.
- The actual Order in Council for the new regulations is here. Look in Division 7 (pp 30-33) for the list of energy-related items exempt from PST.
- The legislation is here.
- Motor fuel tax rates are here.
If you see anything important to our members to add to this post, please let us know: email@example.com
Here's a comment from Hiltz Tanner, who has worked in renewable energy supply for several years:
"Unfortunately they have repeated the same limitations as last time for upgrading a renewable energy system (ie. copy and paste). The exemption only applies to "generators (ie. inverters), controllers, wiring and devices that convert direct current into alternating current, if they are obtained together with and as part of a system that includes [wind power, photovoltaic, microhydro, tidal power]."
This limitation means that upgrades to an existing power system such as new batteries or an inverter (ie. when it reaches the end of it's lifetime) are not included because they are not part of a complete system and you may not be adding a generating source at the same time as the equipment upgrade.
Since all power systems are guaranteed to need components replaced over their lifetime, this exemption should be written to include all components that are part of system. Instead, it only gives the exemption at the time of purchase of the complete system, or when adding more generating capacity.
Furthermore, since the complete system must appear on one invoice with all components to qualify, if you were to purchase some components from several suppliers, then you would not qualify for the exemption. In general this is actually a good thing to get the complete system from one supplier. However, few people know this and can get caught unaware when they expect an exemption and don't get one. "
***Another quote from Hiltz, on batteries:
"Under the old rules, batteries were not specifically mentioned, but they were included because they are a part of a "power system", which is mentioned, or as a "device" that converts DC into AC as part of the system, or as a "generator" providing DC power to the inverter for AC power when your generating source is not in operation (ie. at night time with solar power). Basically, the rules were made up without proper consultation with industry, so the wording is not very good. Also, the focus was on grid-tie-direct power systems (ie. no batteries) and backup/off-grid systems were forgotten "