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Exemptions for bundled sales and bonus items

Last updated on April 1, 2025

If you sell taxable and non-taxable goods, software, services or property together for a single price, you are making a bundled sale. 

Exemptions for bundled sales

The general rule for charging your customers PST on a bundled sale is that you charge PST only on the fair market value of the taxable portion of the sale. However, your customers will not be required to pay PST on the purchase of goods if the following criteria are met:

  • The taxable portion is sold for a single price with the non-taxable portion

  • The fair market value of the taxable portion is:
    • $50 or less, and
    • 10% or less of the total fair market value of all the items and/or services sold as part of the bundle
  • The taxable portion is pre-packaged with the non-taxable portion, or you do not ordinarily sell the two portions separately
  • The taxable portion is not being provided as a promotional item
  • The taxable portion does not include liquor, telecommunications services or legal services

For example: you sell your customer an installed security system for a single price of $1,000. The components all become part of real property upon installation, except for a remote control that arms and disarms the system. The remote control has a fair market value of $40. Because the taxable portion (the remote control) is less than $50 and less than 10% of the single price ($1,000), your customer is exempt from paying PST on the entire single price.

Exemptions for bonus items

You may provide goods as bonus items with the purchase of other goods and services. If all the goods or services are taxable, you must charge your customer PST on the purchase price. You can purchase the bonus items exempt from PST as goods solely for resale.

For example: you may give your customer a free security system as a bonus item with the purchase of an alarm monitoring service contract. For the purpose of PST, these transactions are sales of both items.

If the transaction is for both taxable and non-taxable goods or services for a single price (for example, selling portable cameras that are not substantially attached to real property along with a monitoring service), you are making a bundled sale as described above.

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