Effective February 18, 2026 and October 1, 2026, British Columbia (B.C.) is introducing significant changes to the Provincial Sales Tax (PST) system.
These updates expand PST to certain professional services, eliminate several long-standing exemptions, and introduce new point-of-sale relief for out-of-province business purchases.
Businesses operating in B.C. — particularly professional service firms — should begin preparing now.
1. PST Expansion to Professional Services (Effective October 1, 2026)
For the first time, several professional services will become subject to the 7% B.C. Provincial Sales Tax (PST).
Newly Taxable Services
Beginning October 1, 2026, PST will apply to:
- Accounting services, including bookkeeping and assurance services
- Architectural services
- Engineering and geoscience services (PST applies to 30% of the service value)
- Non-residential real estate services, including:
- Real estate trading services
- Rental property management services
- Strata management services
- Security services, including private investigation services
What This Means for Businesses
If your business provides any of the above services, you will need to:
- Register for a PST account (if not already registered)
- Begin charging 7% PST on taxable services starting October 1, 2026
- Update invoicing systems and contracts
- Adjust accounting software and internal tax reporting processes
This marks a major policy shift, as professional services were previously outside the core PST tax base.
2. Elimination of Certain PST Exemptions (Effective October 1, 2026)
The B.C. government will also remove several existing PST exemptions.
Goods and Services Losing PST Exemption
The following items will become taxable at 7% PST:
Clothing-related materials
- Clothing patterns
- Yarn
- Natural fibres
- Synthetic thread
- Fabric commonly used to make or repair clothing
Services related to clothing and footwear
- (Note: basic laundry services remain exempt)
Communication services
- Basic cable television services
- Residential landline telephone services
- Toll-free telephone services
Businesses and consumers should expect modest price increases in these areas starting October 1, 2026.
3. New PST Point-of-Sale Exemption for Out-of-Province Business Use (Effective February 18, 2026)
Effective February 18, 2026, amendments to the Provincial Sales Tax Act allow sellers to provide a point-of-sale exemption or refund within 180 days for businesses purchasing goods for business use outside B.C.
Key Changes
- Businesses purchasing goods for use outside B.C. may qualify for exemption
- Purchasers may now arrange to ship goods out of the province themselves
- Sellers are no longer required to ship the goods directly to qualify for exemption
- Proper documentation remains required
This change provides greater flexibility for interprovincial business transactions and reduces administrative burdens.
4. Policy Background and Economic Impact
The 2026 PST changes were introduced as part of B.C.’s broader fiscal strategy to:
- Broaden the PST tax base
- Increase provincial revenues
- Align B.C.’s tax structure more closely with other provinces that apply sales tax to certain professional services
Potential Impact on Businesses
Business groups have raised concerns that:
- Professional service costs will increase
- Real estate and construction projects may face higher expenses
- Small businesses may experience additional administrative burden
Firms providing newly taxable services should assess pricing structures, contract terms, and cash flow implications well before the October 2026 implementation date.
Key Effective Dates Summary
| Change | Effective Date |
|---|---|
| Point-of-sale exemption for out-of-province business purchases | February 18, 2026 |
| PST expansion to professional services | October 1, 2026 |
| Elimination of certain PST exemptions | October 1, 2026 |
Final Thoughts
The 2026 B.C. PST updates represent one of the most significant expansions of the provincial sales tax base in recent years.
Professional service providers — especially accounting firms, engineers, architects, and property managers — should begin preparing immediately to ensure compliance, avoid penalties, and manage client expectations.
If you are unsure how these changes affect your business, consider conducting a PST impact review and updating your tax compliance processes before October 2026.