As if pandemic lockdowns weren't already hard enough on the live music industry, some Canadian festivals are reportedly about to be hit with a steep tax bill. This specifically applies to festivals in British Columbia that pivoted to online livestreams in 2020 and 2021, since they are now being classified as "telecommunications" instead of live events. By unknowingly entering a new tax category, festivals will now have to pay 7 percent PST — something that doesn't apply to live events.
Brandon Yan, executive director of the Vancouver Queer Film Festival, tells Exclaim! that he first heard of the new rules from his contacts at the Vancouver International Film Festival. He then reached out to Bob D'Eith, BC's Parliamentary Secretary for Arts and Film.
In an email response shared with Exclaim!, D'Eith's office said:
The answer regarding the online film festival, is that it is subject to a PST for a BC purchaser viewing it on a device ordinarily situated in BC. If a person is selling access to live streamed / online films or events on a device ordinarily situation in BC, then they must charge PST to customers located in BC. This is considered providing a telecommunication service.
The email further states these these rules are not new. According to D'Eith's office:
If the film festival provided such content last year, they ought to self-assess PST on a voluntary disclosure application for the failure to levy PST.
"So we lose 7 percent of our sales to tax, which were already down 80 percent from 2019," Yan says. "Also, it means that, without an exemption, we'll have to increase ticket sales or take a 7 percent hit on ticket revenue this year."
According to BC's Provincial Sales Tax Act, music or movies that are distributed though a telecommunication service are subject to PST.
Yan notes that these laws appear to only apply to businesses bringing in more than $10,000 per year in sales. Yan said that he would be asking BC's Ministry of Finance for an exception from this taxation, at least during COVID-19.
Brandon Yan, executive director of the Vancouver Queer Film Festival, tells Exclaim! that he first heard of the new rules from his contacts at the Vancouver International Film Festival. He then reached out to Bob D'Eith, BC's Parliamentary Secretary for Arts and Film.
In an email response shared with Exclaim!, D'Eith's office said:
The answer regarding the online film festival, is that it is subject to a PST for a BC purchaser viewing it on a device ordinarily situated in BC. If a person is selling access to live streamed / online films or events on a device ordinarily situation in BC, then they must charge PST to customers located in BC. This is considered providing a telecommunication service.
The email further states these these rules are not new. According to D'Eith's office:
If the film festival provided such content last year, they ought to self-assess PST on a voluntary disclosure application for the failure to levy PST.
"So we lose 7 percent of our sales to tax, which were already down 80 percent from 2019," Yan says. "Also, it means that, without an exemption, we'll have to increase ticket sales or take a 7 percent hit on ticket revenue this year."
According to BC's Provincial Sales Tax Act, music or movies that are distributed though a telecommunication service are subject to PST.
Yan notes that these laws appear to only apply to businesses bringing in more than $10,000 per year in sales. Yan said that he would be asking BC's Ministry of Finance for an exception from this taxation, at least during COVID-19.
