Overview

Audience

This article is intended for all Veloce users, resellers and support technicians, doing business or providing technical support for users in the province of British Columbia (BC), Canada.

Requirements

Veloce Version:

Veloce POS 9.64 or later.

Tax Overview

Effective April 1, 2021, soda beverages will no longer qualify for the exemption for food products for human consumption. PST will apply to all retail sales of soda beverages at a rate of 7%.

If you sell soda beverages and are not already registered as a PST collector, you must register to collect and remit PST. Ensure your point of sale systems are updated to charge PST on soda beverages effective April 1, 2021.

What Are Soda Beverages?

Soda beverages are carbonated or effervescent beverages that have bubbles and fizz and contain any of the following:

• Sugar

• Natural occurring sweeteners

• Added natural sweeteners (such as honey, molasses, maple syrup, fruit juice, stevia, etc.)

• Artificial sweeteners (such as aspartame, sucralose, saccharin, etc.)

Carbonation or effervescence may be either naturally occurring in drinks (as in the case of fermented non-alcoholic beverages, such as kombucha) or injected after the beverage has been manufactured (e.g. with carbon dioxide or nitrogen).

Examples of Soda Beverages Include:

• Soft drinks and soda pop

• Sparkling fruit juices

• Carbonated or nitrogenized energy drinks

• Kombucha

• Nitrogenized coffee (if sweetened)

• Sparkling, sweetened water

Soda beverages also include:

• Frozen sweetened beverages, such as Slurpees or Frosters, that have been carbonated or have other gases added to them, and

• Sweetened effervescent beverages that have any of the following added to them:

  • frozen desserts, such as ice cream (e.g. ice cream floats)

  • fruit or fruit flavouring

  • candy, chocolate or another type of confection

Examples of PST application on sodas

This article will cover some common scenarios that can be encountered when the PST is applied to soda beverages in British Columbia, and a brief overview of the required configuration.

British Columbia "Soda Tax" recap

Here is a quick recap of British Columbia's Provincial Sales Tax (PST) rules which applies to soda beverages. For complete and up-to-date documentation regarding taxes, please consult the official British Columbia government site at https://www2.gov.bc.ca/gov/content/taxes/sales-taxes.

• PST applies to all retail sales of soda beverages at a rate of 7%.

• If you offer the beverage for sale without the food or other good, you charge PST on the lesser of:

  • the ordinary purchase price of that beverage, and;

  • the total purchase price of the other good and beverage together.

Or

• If you offer the beverage for sale only with the food or other good, the lesser of:

  • 50% of the total purchase price of the food or other good and beverage together, and;

  • $3

Also, don't forget that almost all items sold in restaurants, including soft drinks, are also taxable by the federal Goods and Services Tax (GST) at a rate of 5%

Example #1

You offer an all-you-can-eat buffet with access to a soda fountain for $30.00. Access to the soda fountain is not sold separately and it is not listed on the menu, therefore it does not have its own price. The $3.00 / 50% rule applies: Since $3.00 is lesser than 50% of $30.00 ($15.00), the PST will be calculated on $3.00.

Configuration for Example #1

• Configure a regular item called "Buffet - Adult" with a price of $30.00.

• Assign the GST and PST as taxes for this item, and enable the exception option on the PST.

Example #2

You offer an all-you-can-eat buffet for $28.00. You offer access to a soda fountain for an additional $2.00, or the customer can use the water fountain, which is free. Because access to the soda fountain is listed separately on the menu, the PST is calculated on the sale price of $2.00 for this item.

Configuration for Example #2

• Configure a Regular item called "Buffet - Adult" with a price of $28.00. Assign only the GST tax on this item.

• Configure a Regular item called "Soda Fountain" with a price of $2.00. Assign both the GST and PST on this item.

• Configure a Regular or Included item called "Water" with a price of $0.00. Don't assign any tax on this item (since it's free).

• Link the Buffet - Adult item to the Soda Fountain and water items through a Forced Remark.

• This will allow the server to select between "Soda Fountain" (pst-taxable) and "Water" (non-pst-taxable).

Example #3

You sell a hot-dog and large soda combo for $5.00. The soda is not listed on the menu and not sold on its own. The $3.00 / 50% rule applies: Because 50% of $5.00 ($2.50) is lesser than $3.00, the BC Soda Tax will be calculated on $2.50.

Configuration for Example #3

• Configure a Regular item called "Hot-Dog + Soda Combo" with a price of $5.00.

• Assign both the GST and PST on this item, and enable the exception option on the PST.

• Configure a Modifier or Included item called "Soda - Included". Set the item's price to $0.00 and make this item part of a Soda/Soft Drink item screen.

• Link the Hot-Dog + Soda Combo item to the Soda - Included item through a Forced Remark.

Example #4

You sell a hot-dog and large soda combo for $5.00. The Hot-Dog on its own is $3.25 and the drink on its own is $2.25, which are both listed on the menu. In this instance, the BC Soda Tax will be calculated on the ordinary sale price of the soda, which is $2.25.

Configuration for Example #4

• Configure all your soft drinks as Regular items, in a "Soft Drinks" item screen. Give them a price of $2.25 each. Assign both the GST and PST on these items.

• Configure a Regular item called "Hot-Dog + Soda Combo" with a price of $5.00. Assign only the GST tax on this item.

• Configure an Included Item called "Large Soda Included" with a price on $0.00. Assign both the GST and PST on this item.

  • To make sure to use the regular price of the soft drink for tax calculation, select a regular soft drink for PST in the Taxable amount item column.

• Link the Hot-Dog + Soda Combo item to the Large Soda Included item through a Forced Remark.

Example #5

You sell a hot-dog and large soda combo for $5.00. The Hot-Dog on its own is $3.25 and the drink is $2.25, which are both listed on the menu. You have a special promotion which gives 75% off hot-dog combos that day, which brings the total price of the combo down to $1.25. In this instance, the PST will be calculated on the total price of the combo, which is now $1.25.

Configuration for Example #5

• Use the same configuration as Example #4.

• Create a 75% Off promotion which will apply on the Hot-Dog combo.

This article explains how to create a simple soda item, which is taxable by the British Columbia Provincial Sales Tax (PST). This configuration applies to all items qualifying as "Sodas", but also to any other item and miscellaneous goods taxable by the PST, such as clothing, bottle openers and souvenirs (e.g. souvenir glasses or pens with your company name on them), etc.

Prerequisites:

• Configure the British Columbia Provincial Sales Tax (PST) as detailed here.

• Configure the federal Goods and Services Tax (GST) as detailed here.

• Create an appropriate item screen as explained here.

Configuration

1. Create Regular sales items for each soda type you sell, like Coke, Pepsi, Sprite, 7-up, Iced tea, Red Bull, Monster, etc. Follow the instructions and information provided in the Create Sales Items article.

2. For each taxable item, configure the tax as follows:

Tax selection

Enable the PST (Provincial sales tax at 7%) and GST (federal Goods and Services Tax at 5%) for all soda items.

Exception (Combo)

Disable this option on all regular items that are not combos. This checkbox only becomes available when the Exception option is enabled in the tax configuration (POS Control > Invoice > Taxes... > [select a tax] > Rate tab > Exception). The text which appears here (Combo in the screenshot) is determined by the text field in the exception configuration.

Taxable amount item

Leave this drop-down list to None for all taxes.

Regular price

This checkbox is grayed-out. Leave it disabled for all taxes.

No tax qty

Leave this option disabled for all taxes.

1. Save this configuration and repeat for all PST-taxable goods.

Result on the invoice

In this scenario, the 7% PST will be calculated on the price of the item, just like any other tax:

SUB-TOTAL: $2.00

PST: $0.14 ($2.00 * 0.07 = $0.14)

GST: $0.10 ($2.00 * 0.05 = $0.10)

TOTAL: $2.24

This article explains how to create a combo item which contains a soda item, where the taxable soda item is not listed on the menu and not available for sale on its own. Here are a few common examples:

• A "hamburger combo" meal which includes a large soda and a choice of sides.

• A "pizza special" that comes with a 2-litre bottle of soda.

• A buffet which includes access to a soda fountain.

The important element to remember for this specific configuration is that in all of these examples, the soda is not listed on the menu and therefore not available for purchase on its own.

Prerequisites:

• Configure the British Columbia Provincial Sales Tax (PST) as detailed here.

• Configure the federal Goods and Services Tax (GST) as detailed here.

• Create an appropriate item screen as explained here.

1. Create Regular sales items for each type of combo. Follow the instructions and information provided in the Create Sales Items article.

2. For each combo item, configure the tax as follows:

Tax selection

Enable the PST (Provincial sales tax at 7%) and GST (federal Goods and Services Tax at 5%) for all combo items.

Exception (Combo)

Enable this option for the PST tax only, on all regular items that are combos, but only if they include a soda item which cannot be purchased on its own. This checkbox only becomes available when the Exception option is enabled in the tax configuration (POS Control > Invoice > Taxes... > [select a tax] > Rate tab > Exception). The text which appears here (Combo in the screenshot) is determined by the text field in the exception configuration.

Taxable amount item

Leave this drop-down list to None for all taxes.

Regular price

This checkbox is grayed-out. Leave it disabled for all taxes.

No tax qty

Leave this option disabled for all taxes.

1. Save this configuration and repeat for all combo items that include a soda item which cannot be purchased on its own.

Result on the invoice

In this scenario, the 7% PST will be calculated on the lesser of:

• 50% of the total purchase price of the food or other good and beverage together, and;

• $3

Item price $6.00 or more

If the item price is $6.00 or more, the "$3 rule" applies, and the PST is calculated on $3.00 as shown in the example below:

SUB-TOTAL: $30.00

PST: $0.21 ($3.00 * 0.07 = $0.21)

GST: $1.50 ($30.00 * 0.05 = $1.50)

TOTAL: $31.71

Item price less than $6.00

If the item price is $5.99 or less, the "50% rule" applies, and the PST is calculated on 50% of the item's selling price as shown in the example below:

SUB-TOTAL: $5.00

PST: $0.18 (($5.00 / 2) * 0.07 = 0.175 = $0.18)

GST: $0.25 ($5.00 * 0.05 = $0.25)

TOTAL: $5.43

This article explains the Veloce configuration required to comply with British Columbia's Provincial Sales Tax Act.

Configuration sequence

1. Create / Configure Tax Categories as explained in the Tax Categories article.

2. Create / Configure Taxes as explained in the Taxes articles. You may also refer to the tables below for specific settings.

3. Assign taxes to sales items, as explained in Sales Item Setup - Taxes article.

Suggested Tax Categories for Veloce

British Columbia has two tiers of sales taxes. The first tier is managed at the provincial level, which includes the provincial sales tax and liquor tax. The second tier is managed at the federal level, which includes the Goods & Services Tax (GST). Therefore, it is suggested to use two Tax Categories for Veloce:

• Provincial Taxes

• Federal Tax

Required Taxes in Veloce

Provincial Taxes:

• Provincial Sales Tax (PST) - 7%

• Provincial Sales tax (PST) for liquor - 10%

Federal Taxes:

• Goods and Services Tax (GST) - 5%Detailed Tax Configurations

The following tables list all the options and settings for each tax. Refer to the Taxes article to learn how to create a new tax, and refer to the tables below for each individual setting.

Provincial Sales Tax (PST) - 7%

The provincial Sales Tax at a rate of 7% applies to sodas as explained in the B.C. Soda Tax Overview article. However, if you also sell miscellaneous goods, such as clothing, bottle openers and souvenirs (e.g. souvenir glasses or pens with your company name on them), you also need to apply the 7% PST on these items. The PST may be used as an add-on tax or an inclusive tax.

Veloce Tax Settings for 7% PST

Provincial Sales Tax (PST) for liquor - 10%

The provincial Sales Tax at a rate of 10% applies to all alcoholic beverages containing more than 1% of alcohol per volume, such as beer, spirits and liqueurs, wine, mixed drinks, etc.

Settings for 10% PST (Liquor tax)

Goods and Services Tax (GST) - 5%

The federal Goods and Service Tax (GST) at a rate of 5% applies on all goods and services, including food, beverages, alcohol, clothing, souvenirs, etc. The GST may be used as an add-on tax or an inclusive tax.

Veloce Tax Settings for 5% GST

This article explains how to create a combo item which contains a soda item, where the taxable soda item is listed on the menu and available for sale on its own.

Prerequisites:

• Configure the British Columbia Provincial Sales Tax (PST) as detailed here.

• Configure the federal Goods and Services Tax (GST) as detailed here.

• Configure all your taxable soda items as described in Example #1: Simple item.

1. Create an item screen that will contain "Included Item" versions of all your sodas. Give an appropriate name to this item screen, such as "Included beverages" for example. You may refer to the Item Screens article to learn more about item screens.

2. Create an "Included Item" version of each of your sodas, with a price of $0.00. Follow the instructions and information provided in the Create Sales Items article for more details.

Description

Type a meaningful description. It is also recommended to add a descriptor such as "(included)" to differentiate this item from its regular counterpart.

Type

Set the item's type to Included item.

Regular price

Set the item's price to $0.00, since this item will be included with the purchase of a combo.

1. For each included item, configure the taxes as follows:

Tax selection

Enable the PST (Provincial sales tax at 7%) and GST (federal Goods and Services Tax at 5%) for all soda Included items.

Exception (Combo)

Disable this option on all Included items. This checkbox only becomes available when the Exception option is enabled in the tax configuration (POS Control > Invoice > Taxes... > [select a tax] > Rate tab > Exception). The text which appears here (Combo in the screenshot) is determined by the text field in the exception configuration.

Taxable amount item

On the PST line, select the regular item that will be used to determine the price to use for the purpose of tax calculation. For example, if you are creating the "PEPSI (included)" item, select the "PEPSI" regular item. This will cause Veloce to use the ordinary selling price of the Pepsi ($2.00) to calculate the PST.

Regular price

This checkbox will become available once you select an item from the drop-down list. Leave it disabled for all taxes.

No tax qty

Leave this option disabled for all taxes.

1. Create Regular sales items for each type of combo. Follow the instructions and information provided in the Create Sales Items article for more details.

2. For each combo item, go to the Ordering options tab and make sure to use Forced Remarks to call up the Included Beverages Item Screen:

1. For each combo item, configure the tax as follows:

Tax selection

Enable the GST (federal Goods and Services Tax at 5%) only.

Exception (Combo)

This option is grayed out and shall therefore remain disabled for all taxes.

Taxable amount item

Select None on each line.

Regular price

This option is grayed out and shall therefore remain disabled for all taxes.

No tax qty

Leave this option disabled for all taxes.

1. Save this configuration and repeat for all combo items.

Process at the POS

1. The employee logs on to the POS.

2. Employee orders a $5.00 combo item.

3. The list of included beverages automatically appears, as the combo calls the beverages item screen through a forced remark.

4. The employee selects a taxable beverage.

5. The employee prints the invoice and charges the customer.

6. The GST is calculated on the full price of the combo ($5.00).

7. The PST is calculated on the ordinary selling price of the soda beverage ($2.00).

Result on the invoice

With this configuration, the PST is calculated on the ordinary selling price of the included taxable beverage, while the GST is calculated on the price of the combo:

SUB-TOTAL: $5.00

PST: $0.14 ($2.00 * 0.07 = $0.14)

GST: $0.25 ($5.00 * 0.05 = $0.25)

TOTAL: $5.39

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