When it comes to sales taxes in Canada, I always imagine this type of tax collection man shows up every time I buy something:
Prices in Canada do not include taxes. In Russia we look at a price tag and this is the final price. Nothing is usually added on top of it. In Canada, different products and services are taxed differently and they don’t show after tax price on price tags. It makes precise calculation more difficult.
A good news: sales taxes in British Columbia are generally lower (12%) than VAT in Russia (18%, added to virtually everything you buy). Bad news: some prices are higher (some are lower though) even without taxes 🙂 I will be writing on prices here at some point in future.
Sales taxes are subdivided:
- Goods and Services Tax (a.k.a GST)
- Provincial Sales Tax (a.k.a. PST)
In British Columbia, tax rates are the following: GST — 5%, PST — 7%. In total this results in 12% of tax.
Some goods are exempt from PST:
- Food for human consumption (e.g. basic groceries and prepared food such as restaurant meals)
- Books, newspapers and magazines
- Children-sized clothing
- Bicycles, because we’re so green here 🙂
- Prescription medications and household medical aids such as cough syrup and pain medications
Some goods are exempt from GST as well:
- Basic groceries
- Inward/outbound transportation and medical devices
- Prescription medications
I also noted that some categories of goods require additional fees added on top of the price. For instance, when we bought a TV, we had to pay some environmental fare. People in British Columbia are no less environmentally minded than those in California. Probably even more.
Rents are not subject to GST/PST of course, but landlords are taxed because the rent makes their gross revenue. So when you see a rent, it is a final rate. Apart from that you would be better using this sales tax calculator to improve your understanding of prices (I usually post prices already including taxes, but for your budget process it might be handy to check it out):