Sales tax is the money you collect on the government's behalf, not your own — and treating it as your own is one of the most common and avoidable ways a healthy BC business gets into trouble with the CRA and the province. If you operate in British Columbia, you are likely juggling two separate regimes with two separate rhythms: federal GST/HST and provincial PST. They have different thresholds, different forms, different remitters, and different due dates. Getting the calendar right is not glamorous, but it protects your cash and keeps you off the penalty list.
The core principle is simple. GST and PST you charge customers are trust funds. They sit in your bank account temporarily, and they belong to the tax authorities. The discipline is to file on the right schedule and remit on time, every time. Let us map both regimes.
How is your GST/HST filing frequency determined?
The CRA assigns your GST/HST reporting period based on your annual taxable supplies — essentially your revenue subject to GST. The thresholds are:
- $1.5 million or less: annual reporting period (you may elect to file quarterly or monthly).
- More than $1.5 million up to $6 million: quarterly reporting.
- More than $6 million: monthly reporting.
For monthly and quarterly filers, the GST/HST return and any amount owing are due one month after the end of the reporting period. For most annual filers, the return and payment are due three months after the fiscal year-end. Note that GST is charged at 5% in BC.
A practical point many owners miss: even if your revenue qualifies you for annual filing, electing to file quarterly can be the better discipline. Annual filing means a single large remittance once a year — easy to under-reserve for. Quarterly filing breaks it into manageable pieces and surfaces problems sooner.
How does BC PST filing work?
BC charges a separate 7% provincial sales tax, administered by the province, not the CRA. Your PST reporting frequency is set at registration based on how much PST you collect per reporting period:
- Over $50,000 in PST per month: monthly reporting.
- $10,000 to $50,000: quarterly reporting.
- Under $10,000: annual reporting (with semi-annual also possible in some cases).
The PST due date is consistent and easy to remember: your completed return and payment must be received on or before the last day of the month following the end of the reporting period. So a period ending June 30 is due by July 31. If the due date lands on a weekend or BC statutory holiday, it moves to the next business day.
One rule trips up owners with quiet months: you must file a PST return even if you collected no PST. Enter "NIL" and file anyway. A missed nil return is still a missed return.
A worked example: the cost of treating remittances as cash flow
Sales tax penalties are not large in headline terms, but they compound a deeper problem — spending money that was never yours. Consider a fictional BC distributor, Fraser Valley Supply Ltd.
The company collects GST and remits quarterly. In one quarter it owes $38,000 in net GST. Cash is tight, so the owner quietly delays filing and remitting, telling himself he will catch up next quarter. The GST/HST late-filing penalty is calculated as 1% of the amount owing, plus 0.25% of that amount for each full month the return is late, up to 12 months. On top of the penalty, the CRA charges interest, compounded daily, on the unpaid balance.
Three months late on $38,000: the penalty is roughly 1% + (0.25% × 3) = 1.75% of $38,000 ≈ $665, plus daily-compounding interest on the full balance for the period it was outstanding.
The $665 penalty is almost beside the point. The real damage is that the $38,000 was never the company's money — it was a trust fund spent on operations. When the next quarter's GST also comes due, the business is now two remittances behind with no reserve, and the hole deepens. This is precisely how a profitable company ends up in a CRA payment arrangement. The fix is structural: treat collected sales tax as untouchable from the day you collect it.
What about input tax credits and PST you pay?
GST and PST behave very differently on the purchasing side, and confusing the two costs BC owners money.
On the GST side, you recover the GST you pay on business inputs through input tax credits (ITCs). When you file your GST/HST return, you remit the GST you collected on sales minus the GST you paid on eligible business purchases. The net is what you owe — or, in a quarter heavy on capital spending, you may even be in a refund position. This is why GST is sometimes described as a tax on value added rather than on the business itself. The discipline here is record-keeping: you can only claim ITCs you can support with proper invoices showing the supplier's GST number. Sloppy receipts mean lost credits, which is real after-tax money.
PST is the opposite. As a BC business, you generally cannot recover the PST you pay on goods you consume in your operations the way you recover GST — PST is a true cost to most purchasers, not a flow-through. There are specific exemptions for goods you buy for resale and certain production inputs, but the default is that PST you pay stays paid. This asymmetry matters for budgeting: a $30,000 equipment purchase carries $1,500 of GST you will recover and $2,100 of PST you typically will not. Owners who assume both taxes wash out are routinely surprised.
Two regimes, two registrations, two mindsets
It is worth stating plainly because the dual system trips people up: GST/HST is federal, administered by the CRA, with its own account number and login. BC PST is provincial, administered by the BC Ministry of Finance, with a separate registration and a separate online portal (eTaxBC). They do not talk to each other. A business can be perfectly current on GST and quietly delinquent on PST, or vice versa. Treat them as two distinct obligations with two distinct calendars, not one blurred "sales tax" task. The owners who get into trouble almost always conflated the two and assumed that filing one covered the other.
Building a reliable compliance calendar
Translate the rules above into a concrete, named-date calendar for your own business:
- Write down your exact frequencies. GST: annual, quarterly, or monthly? PST: monthly, quarterly, or annual? Confirm both in writing from your CRA and provincial accounts.
- List every due date for the next 12 months by name, with a reminder set a week before each.
- Sweep the cash. The most effective control is moving collected GST and PST into a separate bank account or sub-account so it is never visible as spendable operating cash.
- File nil returns when there is nothing to remit. Never skip a period.
- Reconcile collected versus remitted each period so the trust account always covers what you owe.
Key takeaways
- GST/HST frequency follows revenue: $1.5M or less is annual, up to $6M is quarterly, over $6M is monthly; monthly and quarterly returns are due one month after period-end.
- BC PST is a separate 7% provincial regime; returns and payments are due the last day of the month following the reporting period.
- File a PST return even with nothing to report — enter "NIL" rather than skipping the period.
- The GST late-filing penalty is 1% plus 0.25% per full month up to 12 months, with daily-compounding interest on top.
- Sweep collected sales tax into a separate account; the deepest risk is spending trust funds, not the penalty itself.
The sales tax in your account was never yours to spend — and the businesses that internalize that simple fact almost never end up in front of a collections officer.
If your filing rhythm has drifted or you are carrying a sales-tax arrears balance, RN Canada helps BC owners rebuild clean compliance calendars and trust-fund controls. We are happy to review your setup.