British Columbia

B.C. film festival organizer surprised by tax bill after moving programming online during pandemic

The Vancouver Queer Film Festival was exempt from collecting and paying B.C.'s provincial sales tax — until it started streaming films online due to COVID-19.

Vancouver Queer Film Festival was exempt from PST — until it started streaming content

The Vancouver Queer Film Festival, which held in-person events prior to the pandemic, has been hit with a tax bill after it moved its content online without realizing it was putting itself in the same category as streaming services like Netflix. (Facebook/VancouverQFF)

When the pandemic began and in-person entertainment screeched to a halt in British Columbia, the Vancouver Queer Film Festival jumped on the virtual bandwagon and started streaming content online. 

But the move resulted in an unexpected tax bill and a cautionary tale for other organizations.

According to Brandon Yan, executive director of Out On Screen, the organization that produces the festival, live events in B.C. are exempt from paying provincial sales tax (PST).

But Yan says B.C. event organizers who decided to move films and performances online during the pandemic have been surprised to learn they are being billed for the tax.

"No one realized that they suddenly fell into a new tax category of providing a telecommunications service," said Yan, speaking Wednesday on CBC's The Early Edition.

He said he learned about the tax issue not from the government, but through contacts at another Vancouver film festival.

Now, Yan is calculating what the organization owes, which will be seven per cent of last year's ticket sales — which he said were down about 80 per cent last year because of COVID.

He estimates the bill will be about $1,000, which he said is a significant portion of revenue for a community arts organization. 

Financial frustration

Yan is also planning to hold the festival online again this summer and will have to determine if he wants to pass on the additional charge to patrons by adding it to the ticket price, or have the organization try to cover the costs.

"It's just a frustrating additional thing to deal with," he said, adding that B.C.'s LGBTQ community already faces a lot of barriers and organizers have prioritized access and affordability in the past by offering a wide range of ticket prices.

Brandon Yan is the executive director of Out On Screen, the organization that produces the Vancouver Queer Film Festival. (Brandon Yan)

"Now that we know we have to charge PST on top of those, we have to re-evaluate kind of how we do that," said Yan.

Exemption wanted

Yan reached out to Parliamentary Secretary for Arts and Film Bob D'Eith about the issue. 

In a response letter, D'Eith said if a person is selling access to live streamed online films or events on a device ordinarily situated in B.C., then they must charge PST to customers located in B.C. because it is considered to be provision of telecommunication services. 

If the festival is providing free access then there is no PST because there is no sale.

According to B.C. Parliamentary Secretary for Arts and Film Bob D'Eith, the provision of online videos has always been subject to PST, and if festivals provided such content in 2020, they ought to self-assess PST on a voluntary disclosure application for the failure to levy PST. (Intel Free Press - flickr cc)

"It feels like being caught, you know, under [a] new tax that we weren't supposed to be caught under," said Yan, who is hoping the government will make an exception for his organization and others in the same boat. He said he has reached out to the provincial finance minister for help on recommendation from D'Eith.

"This is kind of falling on the shoulders of arts organizations and the communities they serve and I'm hoping that the Ministry of Finance is able to make an exemption," said Yan.

LISTEN | Brandon Yan on the tax implications of moving the Vancouver Queer Film Festival online:

With files from The Early Edition