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New BC tax, PST on soda drinks

Starting April 1, 2021 soda beverages are no longer exempt from the Provincial Sales Tax (PST) in British Columbia.

CFIB continues to push for leniency of this new tax, especially as economic recovery during the COVID-19 pandemic stalls. The decision to introduce this tax was announced by the BC Government in their 2020 Budget; thanks to CFIB Advocacy, the implementation date was delayed a full year – From April 1, 2020 to April 1, 2021.

What is a soda beverage?

The new tax applies to all carbonated or effervescent beverages (anything that bubbles or fizzes) and contain any of the following:

  • Sugar
  • Natural occurring sweeteners
  • Added natural sweeteners (such as honey, molasses, maple syrup, fruit juice, stevia, etc.)
  • Artificial sweeteners (such as aspartame, sucralose, saccharin, etc.)

The means any of the following would be included:

  • Soft drinks and soda pop
  • Sparkling fruit juices
  • Carbonated or nitrogenized energy drinks
  • Kombucha
  • Nitrogenized coffee (if sweetened)
  • Sparkling, sweetened water
  • Frozen sweetened beverages (slurpees)

The tax also applies to vending machine beverages – if your business has one, you must charge, collect and remit PST on all beverages dispended by the machine that are subject to inclusion of PST.

Selling soda beverages with other foods/goods

If your business sells food or other goods with soda beverages (e.g. pizza and a pop), including beverages dispensed by a fountain or soda gun, PST must be charged. Here are the rules for how to include PST:

If you offer the beverage for sale without the food or other good, you charge PST on the lesser of:

  • the ordinary purchase price of that beverage, and
  • the total purchase price of the other good and beverage together.

Or

If you offer the beverage for sale only with the food or other good, the lesser of

  • 50% of the total purchase price of the food or other good and beverage together, and
  • $3.

What are “not” soda beverages?

  • Dealcoholized beer, sparkling wine or cider, if the beverages contain 1% or less alcohol by volume
  • Frozen sweetened beverages that are not carbonated and do not have any gases added to them
  • Liquor (note: liquor is subject to 10% PST)
  • Plain bottled water (still and carbonated)
  • Sparkling flavoured waters that contain no sweeteners
  • Still fruit juices (not carbonated)

Still have questions?

See the BC Governments’ Provincial Sales Tax (PST) Bulletin document for more detail. If you have any questions in relation to applying PST on soda drinks, please contact our Business Resources team for help. You may also contact the BC government with PST questions at [email protected]

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Topics in this Article: Taxes

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