Description: British Columbia is moving to tax sugary soft-drinks starting on April 1. The provincial sales tax will also apply to the drinks carrying other natural or artificial sweeteners. Vaping supplies will also come under this tax initiative, and, streaming services like Netflix will be required to collect provincial sales tax if they do more than $10,000 of annual sales in BC.
Date: March 6, 2021
1) Are you a pop drinker? Would an increase in tax like the one in British Columbia impact your purchases?
2) Do you support the government placing a tax on out-of-province services like Netflix? Why or why not?
3) On page 10-4 of Wiley’s Financial Accounting: Tools for Business Decision-Making, we see how a vendor can account for the collection of sales tax. What journal entry would you make to record the remittance of sales tax by the vendor to the province?