BC PST for Online Marketplaces: A Guide for Sellers on Amazon, Etsy & More
Navigating British Columbia’s Provincial Sales Tax (PST) can be complex for online businesses. The rules shift the tax collection responsibility from the individual seller to the platform itself in many cases. This guide, based on the official BC PST Bulletin 142, uses real-world examples to explain when marketplaces like Amazon collect PST, and when you, the seller, are still responsible.
The Key Players: Who’s Who in the Online Marketplace?
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Online Marketplace: The platform (e.g., Amazon.ca, Etsy.com, Airbnb.com).
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Online Marketplace Facilitator: The company that owns and operates the platform and handles payments (e.g., Amazon, Etsy, Inc., Airbnb).
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Online Marketplace Seller: You—the business or individual selling products or services through the platform.
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Online Marketplace Service: The fees charged by the platform for its services (e.g., listing fees, fulfillment fees, payment processing).
The Golden Rule: Who Collects PST on Your Sales?
The core principle is a major simplification for most small sellers:
The Online Marketplace Facilitator is responsible for calculating, collecting, and remitting PST on taxable sales made through their platform.
Example in Action:
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Scenario: You are a small business in Vancouver selling handmade candles on Etsy to a customer in Kelowna.
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PST Responsibility: Etsy, as the facilitator, will add PST to the customer’s final price at checkout, collect it, and remit it to the BC government.
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Your Role: You do not charge or remit PST on this Etsy sale. You simply receive your payout, less Etsy’s fees.
Important Exception: This rule only applies to sales on the facilitator’s platform. If you also sell candles through your own website, you are responsible for collecting and remitting PST on those direct sales.
Is Your Platform a “Facilitator”? Key Tests
A platform is a “facilitator” if it:
Contracts with sellers (you agree to their Terms of Service).
Provides the platform for retail sales.
Collects payment from the customer on your behalf.
Platforms that merely connect buyers and sellers but don’t handle the payment (e.g., some classifieds sites) are not considered facilitators.
Common Platform Scenarios Explained with Brands
| Platform / Scenario | Is it a Facilitator? | Who Collects PST on Sales? |
|---|---|---|
| Selling on Amazon.ca (using FBA or FBM) | Yes. Amazon contracts with you, hosts the listing, and collects customer payment. | Amazon collects and remits PST on sales to BC customers. |
| Selling on Etsy | Yes. Etsy handles the transaction and payment. | Etsy collects and remits PST on sales to BC customers. |
| Renting on Airbnb | Yes. Airbnb facilitates the booking and processes payment. | Airbnb collects and remits PST & MRDT on BC accommodation rentals. |
| Selling on Shopify | No. Shopify provides the software for your store, but you are the merchant of record processing sales. | You, the seller, are responsible for collecting and remitting PST. |
| Selling on Facebook Marketplace (with checkout) | Yes, if payment is processed through Meta. If buyers pay you directly (e.g., e-transfer), then No. | Meta collects PST if they handle payment. You collect PST if you handle payment. |
The Hidden Tax: PST on Marketplace Service Fees
A critical and often overlooked rule is that PST also applies to the fees the facilitator charges you.
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What is taxed? The 7% PST applies to services like:
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Listing fees
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Promoted listing fees (advertising)
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Fulfillment and storage fees (e.g., Amazon FBA fees)
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Payment processing fees
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Who pays? The facilitator should charge you PST on these fees.
Examples of PST on Fees:
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Amazon FBA: You send your inventory to an Amazon fulfillment center in BC. Amazon charges you a monthly storage fee and fulfillment fees. They must add 7% PST to these service fees when you are located in BC or your goods are stored in BC.
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Etsy Ads: You pay Etsy to promote your listing. Etsy will add 7% PST to your advertising fee if you are a seller located in BC.
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Airbnb Host Fees: Airbnb charges hosts a service fee for each booking. PST applies to this fee for rentals located in BC.
Seller Checklist: Your Ongoing Responsibilities
Even though the facilitator collects tax on your platform sales, you still have obligations:
PST on Non-Marketplace Sales: Register for and collect PST on sales from your own website or physical store.
PST on Services You Buy: Ensure PST is being charged on your marketplace service fees. If it isn’t, you may have to “self-assess” and pay the tax directly to the government.
Record Keeping: Maintain clear records distinguishing between your marketplace and non-marketplace sales.
Summary: Key Takeaways
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For Sales: If you sell through a major platform like Amazon, Etsy, or Airbnb, they handle the PST on the sale to the end customer. If you sell on Shopify or your own site, you handle it.
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For Fees: Expect to pay 7% PST on the fees charged by these major platforms. Check your invoices to ensure it’s being applied correctly.
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Don’t Assume: Always verify a platform’s role. The key question is, “Do they collect payment from my customer?” If yes, they are likely the facilitator responsible for sales tax.
By understanding these rules and how they apply to the platforms you use, you can ensure full compliance with BC’s PST regulations and avoid unexpected tax liabilities.
Frequently Asked Questions (FAQs)
1. Does Amazon collect PST on my sales in British Columbia?
Yes. Amazon is considered an Online Marketplace Facilitator. As of the rules outlined in PST Bulletin 142, Amazon is responsible for collecting and remitting PST on taxable sales made by third-party sellers to customers in BC through the Amazon.ca marketplace.
2. As an Etsy seller, do I need to charge PST to my BC customers?
No, you do not. Etsy is the registered facilitator. Etsy automatically calculates, collects, and remits PST on behalf of its sellers for sales shipped to addresses in BC. You are not required to handle PST for sales made through the Etsy platform.
3. I use Shopify. Who is responsible for collecting PST?
If you use Shopify to power your own independent online store, you are the seller of record. Shopify provides the software but does not act as a marketplace facilitator for your sales. Therefore, you are responsible for registering for, collecting, and remitting PST on all taxable sales to BC customers.
4. Do I pay PST on Amazon FBA storage and fulfillment fees?
Yes, in most cases. Storing goods in a warehouse and using fulfillment services are considered Online Marketplace Services. If your goods are stored in an Amazon FBA warehouse located in BC, Amazon must charge you 7% PST on those storage and fulfillment fees.
5. I only sell exempt products (e.g., baby clothes). Does my facilitator still need to register?
No. An online marketplace facilitator is only required to register and collect PST on taxable sales. If you exclusively sell PST-exempt goods through the marketplace, the facilitator is not required to register for those sales. However, they may still need to register if they provide taxable online marketplace services to sellers in BC.
6. I’m a small seller. Is there a sales threshold before I have to worry about PST?
The $10,000 “small seller” threshold applies to the facilitator, not to you as an individual seller. If the facilitator’s total BC sales (from all their sellers) exceed $10,000, they must register and collect PST on all taxable sales, including yours, regardless of your individual sales volume.
7. I run a B&B and list it on Airbnb and Vrbo. Who collects the PST and MRDT?
Both Airbnb and Vrbo are considered marketplace facilitators for accommodation. They are responsible for collecting and remitting both the 8% PST and the applicable Municipal and Regional District Tax (MRDT) on your short-term rental bookings located in BC.
8. What happens if my marketplace facilitator doesn’t collect the PST?
While the primary responsibility falls on the facilitator, the BC legislation holds the online marketplace seller jointly and severally liable. This means the BC government can pursue you, the seller, for any uncollected PST on sales made through the platform.
9. I’m located in Alberta but sell to BC customers on eBay. Who pays the PST?
eBay, as the facilitator, is responsible for collecting PST from your BC customers on sales made through its platform. Your location does not change this responsibility, as the tax is based on the location of the customer (BC) and the fact that the sale is facilitated by eBay.
10. I paid for advertising on Etsy. Why was I charged PST on the fee?
The advertising service Etsy provides is considered a taxable Online Marketplace Service. Because Etsy is the facilitator and you are a seller using its platform, Etsy must charge 7% PST on the advertising fees it charges you, just like any other service fee.