The BC liquor tax is a 10% provincial sales tax that applies to almost every alcoholic drink sold in British Columbia, from a bottle of wine at a private retailer to a pint at a neighbourhood pub. Add the federal 5% GST and you pay 15% in visible sales tax at the register. A federal excise duty and the BC Liquor Distribution Branch’s wholesale markup are already baked into the price before you see it.
How the 10% PST Is Calculated
Under BC’s Provincial Sales Tax Act, liquor is taxed at 10% rather than the 7% rate that applies to most consumer goods. The 10% is calculated on the retail price of the drink or bottle before GST is added.1Canada Revenue Agency. Changes to the Harmonized Sales Tax
A $50 bottle of spirits carries $5.00 in PST and $2.50 in GST, so you pay $57.50 at the till. The two taxes are shown separately on your receipt because they go to different levels of government.
What Counts as Liquor
BC defines liquor as any product intended for human consumption that contains more than 1% alcohol by volume.2BC Laws. Liquor Control and Licensing Act That covers spirits, wine, beer, cider, coolers, and mixed drinks, whether they come from a sealed bottle at a retail outlet or a glass at a restaurant.
A few products fall outside the 10% rate. Dealcoholized beer, cider, and wine with 1% alcohol or less are not treated as liquor for PST purposes, and are taxed at 7% or exempt entirely depending on the product. Cooking sherry sold at grocery stores is also exempt.3Province of British Columbia. PST 206 Grocery and Drug Stores If a product sits on the shelf next to regular groceries and clocks in at 1% or less, expect the standard PST rate or no PST rather than the liquor surcharge.
Federal Excise Duty and LDB Markup in the Shelf Price
The 10% PST is the most visible tax at the register but not the only one. Two additional federal charges apply to every alcoholic product sold in Canada: the 5% GST and a federal excise duty.
The excise duty is embedded in the wholesale price before the product ever reaches the shelf. As of April 1, 2026, the rates are:
- Spirits above 7% ABV: $14.117 per litre of absolute ethyl alcohol
- Wine above 7% ABV: $0.745 per litre
- Beer above 2.5% ABV: $37.69 per hectolitre
Lower-alcohol products in each category pay reduced excise rates, and small domestic breweries qualify for steeply discounted rates on their first 75,000 hectolitres.4Canada Revenue Agency. Excise Duty Rates Producers and importers pay this duty, not the customer at the till, so it rarely shows up as a separate line. But it’s a real part of the sticker price.
On top of excise, the BC Liquor Distribution Branch applies its own wholesale markup before products reach retailers. The markup formula varies by product category and isn’t published as a single percentage, but it’s the main reason a bottle of spirits costs noticeably more in BC than the base production cost would suggest. By the time you add the LDB markup, federal excise duty, 10% PST, and 5% GST, roughly a third to half of what you pay at the register goes to some combination of taxes and government charges.
Tax on Corkage, Gift Baskets, and Discounted Drinks
Corkage Fees
If a restaurant lets you bring your own wine and charges an opening or corkage fee, PST does not apply to that fee. The corkage charge is not considered part of the purchase price of the wine, so the restaurant should not add 10% on top.5Province of British Columbia. Food and Beverage Service Providers and Retail Liquor Sellers If you see PST on a corkage line, the restaurant is overcharging you.
Gift Baskets and Bundled Sales
When liquor is sold as part of a gift basket or other bundled product, the normal bundled-sales exemption does not apply. PST is charged at 10% on the fair market value of the liquor portion and at 7% on any other taxable items in the bundle.6Province of British Columbia. PST 316 Bundled Sales and Leases One simplification rule applies: if the taxable portion (including the liquor) makes up more than 90% of the single price and the total is under $500, PST applies to the entire basket price rather than requiring the business to split out each component.
Below-Cost Promotions and Giveaways
Selling liquor below cost to attract customers creates an extra PST obligation that catches some businesses off guard. The customer pays 10% PST on whatever discounted price they actually pay, and the business must self-assess and remit PST on the gap between its cost and the sale price. If a restaurant buys wine at $40 per bottle and sells it for $30 during a promotion, the customer pays PST on $30 and the business separately owes PST on the remaining $10. Giving drinks away as samples or prizes works the same way: the business owes PST on the cost of the promotional goods.
Selling Liquor: Registration, Filing, and Penalties
Any business that sells liquor in BC must register with the province to collect and remit PST. This applies to government liquor stores, private retail outlets, restaurants, bars, pubs, and private clubs. Registration requires a copy of your liquor licence with the application.7Province of British Columbia. PST 001 Registering to Collect PST There is no separate liquor-specific PST number; you get a standard PST registration that reflects liquor sales.
Special Event Permit holders (weddings, festivals, fundraisers) must also charge 10% PST on every drink sold at the event.8Government of British Columbia. Apply for a Liquor Special Event Permit Any PST collected in excess of what was already paid on the purchased stock must be remitted to the Ministry of Finance by the last day of the month after the licence expires.
Businesses file PST returns and pay through the eTaxBC online portal. The deadline is the last day of the month following the reporting period, shifting to the next business day if it falls on a weekend or BC statutory holiday.9Province of British Columbia. Reporting and Paying PST Businesses collecting more than $12,000 in PST per year file monthly, and most active bars and restaurants fall into that group by default. Smaller collectors may qualify for quarterly, semi-annual, or annual filing.
Missing a deadline is expensive. Interest compounds monthly on any late or underpaid amount, and the province adds a penalty of 5% of the unpaid tax plus 1% for each complete month the return stays outstanding, up to 12 months.10Province of British Columbia. CTB 005 Penalties and Interest Repeat offenders face 10% of the unpaid amount plus 2% per month for up to 20 months, and an automatic 10% penalty applies if you’ve been warned about an error and make the same mistake again. These penalties stack on top of the interest, so a business that falls several months behind on liquor PST remittances can end up owing significantly more than the original tax.