Whereas taxation on internet sales of short term accommodation and other shared services has not been addressed by provincial and federal governments and in the absence of internet sales regulations, those involved often conclude that no taxes are due; And whereas, historically, short term accommodation providers pay commercial property taxes, commercial utility fees as well as provincial sales and federal goods and services taxes, costs that may represent 25 to 30 of the room costs; And whereas the local marketing and promotion of tourism are significantly funded by the additional 2 or 3 accommodation tax through the Municipal Regional District Taxation regulations: Therefore be it resolved that UBCM request the Province of British Columbia, through the Ministry of Community, Sport and Cultural Development, Ministry of Jobs, Tourism and Small Business and the Ministry of Finance examine these issues and work with UBCM to establish regulations for short term accommodation that address taxation fairness and compliance to permit an equitable competitive environment between all short term accommodation providers.
Ministry of Finance The government is very aware of the concerns being raised about the peer-to-peer, or sharing, economy generally and the specific concerns being raised about accommodation. Most of the concerns are related to level playing fields between traditional providers of goods and services, including accommodation, and those providing goods and services through peer-to-peer networks. These concerns relate primarily to the lack of regulatory requirements for the sharing economy, rather than actual differences in tax treatment. Income taxes are payable on income earned from participating in the sharing economy. Under the BC-Canada Tax Collection Agreement, British Columbia personal and corporate income taxes are administered and enforced by the Canada Revenue Agency. The Canada Revenue Agency is actively working to enforce compliance of the sharing economy along with its efforts to combat the underground economy. British Columbia encourages and supports these efforts. Whether a property is taxed at the residential property class rate or the business property class rate or split between the two property classes depends on several factors and there are distinct rules for classifying single family residences, condos and apartments that are used for both residential housing and short term overnight commercial accommodation. The BC Assessment Authority continually works to ensure property is properly classified. Where an accommodation provider provides, or offers to provide, four or more units of short term accommodation, that accommodation is taxable under the PST including the MRDT unless another specific exemption applies regardless of whether it is provided in a hotel, in a BB or in a residence. Accommodation which is subject to tax under the Provincial Sales Tax Act remains taxable regardless of how it is advertised or how providers and customers connect whether through traditional means or through online platforms such as online home rental services. The Ministry of Finance and governments at all levels are continually working to ensure compliance with tax laws.