SMITHERS, B.C. – British Columbia farmers may soon be able to claim the provincial sales tax from all farm inputs rather than try to figure out if the purchases are on an exemption list.
Since 1948, PST exemptions were available on certain pre-approved farm items in the province. As agriculture changes, farmers and industry are forced to lobby to have each new piece of technology or chemical added to the sales tax exemption list.
Retailers are equally frustrated with the labour-intensive process they are expected to administer and make judgment calls on whether a certain piece of equipment qualified for an exemption.
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“There’s ongoing frustration around PST,” said Steve Thomson, executive director of the B.C. Agriculture Council, which is negotiating with the government to change the way PST is charged on farm inputs.
Instead of having an exemption list, PST would be charged on all inputs and farmers would apply for a refund.
“It’s simpler and we feel it’s more equitable,” Thomson told the British Columbia Cattlemen’s Association annual meeting.
“We’re proposing to move to a rebate system instead of an exemption list.”
Eliminating the list would automatically expand the definition of farm inputs and include new technology in the future. The change would also remove retailers from the tricky situation of figuring out if an item is exempt, said Thomson.
The change would force some farmers and ranchers to improve their accounting system to ensure they can get the sales tax returned.
Thomson said the government proposes that a deductible be paid by each farmer to offset possible personal use of farm equipment like all-terrain vehicles. The association is also recommending farmers be able to apply for the PST rebate several times a year and have no PST on large items like bulk fertilizer, machinery or fuel.
Thomson said the final proposal would be brought back to farmers by fall.
