On February 17, 2026, the Province of British Columbia released Notice 2026-001: Notice to providers of professional services, providing administrative guidance following the proposed PST expansion announced in Budget 2026.
The Notice confirms that, subject to Royal Assent of the Budget legislation, the provincial sales tax (PST) will apply to certain professional services effective October 1, 2026.
This marks one of the most significant base expansions of the B.C. PST in while.
Services Now Subject to PST
Notice 2026-001 confirms that, effective October 1, 2026, the following services will become subject to PST at 7 per cent:
- Accounting services, including bookkeeping and assurance services
- Architectural services
- Engineering and geoscience services
- Security services, including private investigation services
- Non-residential real estate services, including commissions related to buying and selling non-residential real estate, rental property management services and strata management services
The Notice reiterates the Budget’s policy position that B.C.’s sales tax base has historically been narrower than other provinces and that this expansion aligns B.C. more closely with broader service taxation in other jurisdictions.
Special Rule: 30 per cent Tax Base for Architectural, Engineering and Geoscience Services
One notable feature of the measure is the partial inclusion rule. Under the proposed legislation, PST on architectural, engineering and geoscience services will apply to 30 per cent of the purchase price of those services. This results in an effective PST rate of 2.1 per cent on the full fee (7 per cent × 30 per cent ), reducing the tax burden relative to the standard 7 per cent application. The partial inclusion appears intended to mitigate cascading tax effects in construction and capital projects.
Registration and Compliance Requirements
The Notice makes clear that:
- Providers of these services must charge and collect PST on or after October 1, 2026, unless a specific exemption applies
- Businesses not currently registered for PST must register to collect and remit PST. Businesses already registered should ensure their registration profile and internal systems reflect the newly taxable services
- Registration may occur up to six months prior to the first taxable sale (e.g., April 1, 2026 for October 1, 2026 implementation)
Further technical guidance will be released once the associated regulations are issued.
Other PST Measures in Budget 2026
The expansion of PST to certain professional services is part of a broader set of Provincial Sales Tax amendments introduced in Budget 2026.
Elimination of Certain PST Exemptions
Effective October 1, 2026, the following exemptions are eliminated:
- Clothing patterns, yarn, natural fibres, synthetic thread and fabric commonly used to make or repair clothing
- Services related to clothing and footwear (basic laundry services remain exempt)
- Basic cable television services
- Toll-free telephone services
- Residential landline telephone services
These changes are intended to improve neutrality and align the tax treatment of traditional services with modern alternatives that are already taxable.
New Point-of-Sale Exemption for Out-of-Province Business Use
Effective February 18, 2026, amendments to the Provincial Sales Tax Act and related regulations permit sellers to provide:
- A point-of-sale exemption, or
- A refund within 180 days to businesses purchasing goods for business use outside British Columbia
Importantly, the new rule allows the purchaser to ship goods from B.C. directly, rather than requiring the seller to arrange shipment. This change simplifies compliance and modernizes the existing out-of-province business-use exemption process.
Key Takeaway
Historically, services in British Columbia have generally not been subject to PST. The tax has primarily applied to the sale of tangible goods and software, with services taxed only where explicitly brought within the legislative framework. These include specific categories such as legal services, related services to tangible personal property, accommodation, telecommunication services, and certain other enumerated taxable services.
The expansion announced in Budget 2026 therefore represents a deliberate broadening of the sales tax base to include a defined set of professional services that were previously outside the PST regime.
The measure reflects a structural shift in B.C.’s sales tax policy toward broader service taxation. As further regulations and technical guidance are released, affected businesses should carefully assess transitional billing issues, contract structuring, and cross-border service implications in addition to pricing and compliance impacts.
This article has been prepared for the general information of our clients. Please note that this publication should not be considered a substitute for personalized advice related to your situation.
Frédéric Pansieri
Partner,
Indirect Tax
Frédéric Pansieri Professional Corporation
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