B.C. PST rebate on select machinery and equipment

The B.C. PST Rebate on Select Machinery and Equipment is a temporary provincial sales tax (PST) program to help corporations recover from the financial impacts of COVID-19.

The rebate acts like a refund but is separate from the existing PST Refund process. Under this temporary program, corporations can apply to receive an amount equal to the PST they paid between September 17, 2020 and March 31, 2022 on qualifying machinery and equipment. PST invoiced before the deadline but paid after March 31, 2022 does not qualify for the rebate.

Last updated: October 1, 2021

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Who can apply

All incorporated businesses except the following are eligible to apply:

  • Crown corporations (federal or provincial)
  • Local government corporations
  • Charities, non-profit corporations and not-for-profit corporations, except incorporated businesses wholly or partly owned by charities, non-profit corporations and not-for-profit corporations
  • Schools, school boards and universities, including business, trade and vocational schools
  • Hospitals
  • Regional health boards and community health councils designated under the Health Authorities Act
  • Agents of the government and of the other entities listed above, to the extent that the PST is paid in their capacity as an agent

Unincorporated entities, such as sole proprietors, cannot apply. However, they can choose to incorporate to take advantage of this program. Only machinery and equipment obtained after incorporation are eligible.

Corporate partners in partnerships can apply for the amount of PST they paid on their proportional ownership of machinery and equipment in the partnership. Non-corporate partners of partnerships cannot apply.

Applications must be completed by a director of the corporation or an employee of the corporation who has been delegated signing authority. 

For more information, see Who Can Claim a Refund (Notice 2014-007) (PDF, 149KB).


Qualifying machinery and equipment

The rebate applies to PST paid between September 17, 2020 and March 31, 2022 on qualifying machinery and equipment that are considered capital assets. Generally this means the asset may be capitalized for accounting purposes (for example, may be subject to depreciation).

For simplicity, Income Tax Act (Canada) capital cost allowance (CCA) class definitions already familiar to incorporated businesses are used to establish which types of capital assets qualify for the rebate. Machinery and equipment do not have to be depreciated or claimed as a capital cost for income tax purposes in order to qualify for the rebate.

PST paid on leases (both capital or operating leases) of qualifying machinery and equipment also qualifies.

General qualifications

Most non-consumable goods used in a business qualify for the rebate.

To qualify, the goods must be:

The goods must also be:

  • obtained substantially (more than 90 percent) for the purpose of gaining or producing income
  • purchased or leased in B.C., brought into or received in B.C., brought into B.C. for temporary use, received from a related company, or received as a taxable gift, and
  • in the case of software taxed under Part 4 of the Provincial Sales Tax Act (PSTA), purchased for use on or with a device ordinarily situated in B.C.

Transition rules may exclude certain transactions from eligibility even where PST is paid during the qualifying period of September 17, 2020 to March 31, 2022.

Only PST paid by corporations is eligible for the rebate. PST paid by individuals is not eligible for the rebate (unless the individual is acting as an agent for the corporation). For more information about who can claim a refund, see Who Can Claim a Refund (Notice 2014-007) (PDF, 149KB).

What does not qualify

The following goods do not qualify for the rebate:

What qualifies

The following goods qualify for the rebate:

  • All goods that fall under the CCA classes listed in the table below (including affixed machinery)
  • Zero-emission vehicles (as long as they fall under the CCA classes listed in the table below)
Examples for each capital cost allowance (CCA) class of goods that qualifies for the rebate
Class Examples
8
  • Furniture
  • Appliances
  • Tools costing $500 or more per tool
  • Some fixtures
  • Machinery
  • Outdoor advertising signs
  • Refrigeration equipment
  • Other equipment used in business
  • Photocopiers
  • Electronic communications equipment such as fax machines and electronic telephone equipment
  • Scales
  • Storage bins
10
12
  • Books part of a lending library
  • Tools costing less than $500
  • Medical or dental instruments costing less than $500
  • Kitchen utensil costing less than $500
  • Chinaware, cutlery, tableware
  • Linen
  • Uniforms
  • Dies, jigs, patterns, moulds, lasts
  • Cutting or shaping parts of machines
  • Apparel or costume, including accessories used therewith, used for the purpose of earning rental income
  • A certified feature film or certified production
  • Computer software (other than systems software)
16 Coin-op video games or pinball machines
38 Most power-operated, movable equipment for use in excavating, moving, placing or compacting earth, rock, concrete or asphalt
43

Machinery and equipment used to manufacture and process goods for sale or lease

Note: machinery and equipment already exempt from PST does not qualify

43.1
  • Electrical generating equipment
  • Electrical vehicle charging stations between 10 kilowatts and 90 kilowatts
  • Geothermal heat recovery equipment used to extract heat for sale
43.2 Electrical vehicle charging stations 90 kilowatts or more
46 Network infrastructure equipment and systems software for that equipment
50 General-purpose computer hardware and systems software for that hardware
53

Eligible machinery and equipment to be used in Canada primarily in the manufacturing or processing of goods for sale or lease

Note: machinery and equipment already exempt from PST does not qualify

54 Most zero emission vehicles
55

Zero-emission vehicles that:

  • are taxis, trucks or tractors designed for hauling freight
  • are primarily used by the taxpayer or a person with whom the taxpayer does not deal at arm’s length in a business that includes hauling freight, and
  • have a “gross vehicle weight rating” (as that term is defined in subsection 2(1) of the Motor Vehicle Safety Regulations) in excess of 11,788 kg

Learn more about commonly used CCA classes and their descriptions.

For full definitions of CCA classes, see Schedule II to the federal Income Tax Regulations as they read on September 1, 2020.

Affixed machinery

Affixed machinery is machinery, equipment or apparatus that is:

  • used directly in the manufacture, production, processing, storage, handling, packaging, display, transportation, transmission or distribution of goods, or in the provision of software or a service, and
  • affixed to, or installed in, a building, a structure or land so that it becomes part of real property

For more information, see Bulletin PST 503, Affixed Machinery (PDF, 517KB).

Zero-emission vehicles

For the purposes of the rebate, a zero-emission vehicle is a motor vehicle that is:

  • fully electric
  • fully powered by hydrogen, or
  • a plug-in hybrid that has a battery capacity of at least 7 kWh

The rebate defines vehicle and motor vehicle using the definitions from the Provincial Sales Tax Act.

Definitions from the Provincial Sales Tax Act

Vehicle - a device in, on or by which a person or thing is or may be transported or drawn on a highway, but does not include a device designed to be moved by human power, a device used exclusively on stationary rails or tracks, mobile equipment or a motor assisted cycle.

Motor vehicle - a vehicle, not run on rails, that is designed to be self-propelled or propelled by electric power obtained from overhead trolley wires, but does not include mobile equipment or a motor assisted cycle.

See Bulletin PST 308, Vehicles (PDF, 322KB) for more information about vehicles. 

Late payments of PST

To qualify for the rebate, the PST must be paid by its due date.

In most cases, PST is payable on the earlier of:

  • The day the consideration for a purchase or lease is paid
  • The day the consideration for a purchase or lease becomes due

Detailed rules governing when PST is payable can be found in Part 2 of the Provincial Sales Tax Act.

Late payments of PST do not qualify for the rebate, even if they are made during the qualifying period of September 17, 2020 to March 31, 2022.

Transition rules

Leased goods

For qualifying goods that are leased, the rebate only applies to PST paid on a rental period that includes a right to use the goods on or after September 17, 2020, but not beyond May 31, 2022.

A rental period is a portion of a lease for which a periodic price is payable. For example, a 5-year lease that requires monthly payments has 60 monthly rental periods.

Delivery dates

The rebate does not apply to any goods delivered on April 1, 2022 or later unless a written contract specifies the eligible goods must be delivered no later than May 31, 2022.

Examples

A company that runs a restaurant is applying for the rebate. The company purchased kitchen equipment including a new stove, movable tables and chairs, dishes and metal cutlery, cleaning supplies and paper used for printing daily specials. The purchases were made between September 17, 2020 and March 31, 2022 with PST paid at the time of purchase.

The PST paid on the new stove, movable tables and chairs, and dishes and metal cutlery is eligible for the exemption because:

  • they are qualifying capital assets
  • they are used substantially (more than 90 percent of the time) for producing or gaining income, and
  • the PST was paid during the qualifying period of September 17, 2020 to March 31, 2022

The PST paid on the cleaning supplies and paper used for printing daily specials is not eligible because they are consumables and not capital assets.

A construction company purchased power tools, scaffolding and lumber between September 17, 2020 and March 31, 2022 with PST paid at the time of purchase.

The PST paid on the power tools and scaffolding is eligible for the rebate because:

  • they're capital assets found within the eligible CCA classes
  • they're used substantially (more than 90 percent of the time) for producing or gaining income, and
  • the PST was paid during the qualifying period of September 17, 2020 to March 31, 2022

The PST paid on the lumber is not eligible for the rebate because the lumber is excluded since it will be installed as an improvement to real property.

A delivery company purchased two vehicles on October 1, 2020 for use as delivery vehicles. PST was paid at the time of purchase. One of the vehicles is a zero-emission vehicle and the other is a conventional gasoline vehicle. A third vehicle, a zero-emission vehicle, was purchased on September 1, 2020 for use as a delivery vehicle with PST paid at the time of purchase.

The PST paid on the zero-emission vehicle purchased on October 1, 2020 is eligible for the rebate because:

  • it's a zero-emission electric vehicle
  • it's used substantially (more than 90 percent of the time) for producing or gaining income
  • it's a qualifying capital asset, and
  • the PST was paid during the qualifying period of September 17, 2020 to March 31, 2022

The PST paid on the conventional gasoline vehicle purchased on October 1, 2020 is not eligible for the rebate because it's not a zero-emission vehicle.

The PST paid on the zero-emission vehicle purchased on September 1, 2020 is not eligible for the rebate because the PST was paid outside of the eligibility period of September 17, 2020 to March 31, 2022.

A construction company with locations in B.C. and Alberta brings power tools into B.C. for permanent use from its Alberta location on November 1, 2020. The company self-assesses (pays directly to us) the PST due on the power tools on December 31, 2020. The company also brings in a zero-emission vehicle on November 1, 2020 for use temporarily as a crew shuttle in B.C. until December 31, 2020. The company self-assesses PST under the Temporary Use formula and remits it on December 31, 2020.

The PST paid on the power tools brought into B.C. for permanent use on November 1, 2020 is eligible for the exemption because:

  • they're qualifying capital assets used substantially (more than 90 percent of the time) for producing or gaining income, and
  • the PST was paid (through self-assessment) within the qualifying period of September 17, 2020 and March 31, 2022

The PST paid on the vehicle brought in for temporary use on November 30, 2020 is also eligible for the rebate because:

  • it's a zero-emission vehicle
  • it's a qualifying capital asset, and
  • the PST (in this case the PST paid under the Temporary Use Formula) was paid during the qualifying period of September 17, 2020 to March 31, 2022
 

A company leases a zero-emission vehicle on October 1, 2020 for use as a delivery vehicle. The lease agreement is for three years and ends on September 30, 2023. The rental periods are monthly with PST paid on the lease amount each month.

The PST paid on the rental periods of October 2020 to March 2022 is eligible for the rebate because:

  • the rental periods fall within the qualifying period of September 17, 2020 to March 31, 2022
  • the vehicle is a zero-emission vehicle
  • the vehicle is used substantially (more than 90 percent of the time) for producing or gaining income, and
  • the PST paid on the monthly lease payments was paid during the qualifying period of September 17, 2020 and March 31, 2022

The PST paid on the remainder of the rental periods, April 2022 to September 2023, is not eligible for the rebate because the rental periods fall outside of the qualifying period of September 17, 2020 to March 31, 2022.

A company owns a restaurant and hires a real property contractor to install a new pizza oven. The contractor purchases the pizza oven and installs it into the restaurant kitchen for the company. The pizza oven is bolted to the floor as an addition to the building. No written agreement exists specifying the customer is responsible for payment of PST on the pizza oven. The contractor pays PST on their purchase of the pizza oven.

Although the pizza oven is affixed machinery, the company that owns the restaurant is not eligible for a rebate because the contractor, not the customer, paid PST on the pizza oven. The contractor is not eligible for a rebate on the PST paid on the pizza oven because the pizza oven is not purchased on account of capital, it is instead purchased by the contractor as inventory.

A food distribution company hires a real property contractor to install large commercial freezer units on January 1, 2021. The contractor provides the freezer units to be installed as part of the contract and the customer pays PST to the contractor on the freezer units to be installed under a written agreement on January 1, 2021. The freezer units will be used to store frozen food inventories and are installed in such a way that they become part of the real property (the buildings in which they are housed).

The PST paid on the freezer units by the food distribution company is eligible for the rebate because:

  • the freezer units qualify as affixed machinery under an eligible CCA class
  • they are to be used substantially (more than 90 percent of the time) for producing or gaining income
  • the customer had a written agreement specifying the customer would be responsible for payment of PST on the affixed machinery to be installed by the real property contractor, and
  • the PST was paid during the qualifying period of September 17, 2020 to March 31, 2022

A company purchased desks and accounting software on August 1, 2021. The company purchased the desks and accounting software under a written contract where the desks and software are to be delivered to the company on April 1, 2022. PST is paid at the time of purchase on August 1, 2021.

The PST paid on the desks and software is eligible for the rebate because:

  • the desks and software are being used substantially (more than 90 percent of the time) for producing or gaining income
  • they're qualifying capital assets
  • the PST was paid during the qualifying period of September 17, 2020 to March 31, 2022, and
  • delivery of the goods takes place on or before May 31, 2022 and the delivery was made under a written contract

A partnership has two partners. One partner is a company and the other partner is an individual. Under the partnership agreement, each partner has an ownership interest of 50 percent in all assets of the partnership. On November 1, 2020, the partnership purchased painting equipment for use in the painting businesses it operates. The equipment cost $60,000 and the PST of $4,200 was paid at the time of purchase.

The PST paid by the company partner on their ownership interest in the painting equipment (50 percent of $4,200 which is $2,100) is eligible for the rebate because:

  • the PST was paid by a company during the qualifying period of September 17, 2020 to March 31, 2022
  • the painting equipment is being used substantially (more than 90 percent of the time) for producing or gaining income, and
  • the painting equipment is a qualifying capital asset

The PST paid by the other partner (50 percent of $4,200 which is $2,100) is not eligible for the rebate because the other partner is an individual and not a company.

 


What you need to apply

You'll need all receipts and invoices between September 17, 2020 and March 31, 2022 with proof of the payment of PST on qualifying machinery and equipment. 

Fill out the B.C. PST Rebate on Select Machinery and Equipment Purchase Schedule (Excel, 20.7KB) to help ensure that only qualifying purchases and leases are included in your application. You may be required to provide a copy of the completed schedule as part of your rebate application review. 

Retain your receipts and invoices in case you are audited.

Do not attach copies of receipts and invoices to your application unless you are prompted to do so by the system. If you are prompted, the acceptable file formats include:

.BMP, .DIB, .DOC, .DOCX, .GIF, .JPE, .JPEG, .JPG, .JFIF, .JIF, .ODS, .ODT, .PDF, .PNG, .TIF, .TIFF, .TXT, .XLSX

Have your incorporation information available. You may need to attach your incorporation documents as part of your application.

Have your banking information available. If you have a Canadian bank account, you’ll need to provide your banking information for direct deposit of your rebate payment. If you do not have a Canadian bank account, you’ll receive your rebate payment by cheque.

Get your direct deposit information from a personal cheque or from your financial institution. Be prepared to provide:

  • Branch (transit) number
  • Institution number
  • Account number

The image shows how to find the required numbers on a personal cheque.

The image shows how to find the required numbers on a personal cheque.

You’ll need to attach a document confirming your banking information (for example, a void cheque, bank statement, or letter from your financial institution). This document must include:

  • your legal corporation name
  • the branch (transit) number
  • the institution name or number, and
  • your account number.

We may contact you for further information after you apply.


How to apply

You may only submit a claim for purchases and leases made between September 17, 2020 and March 31, 2022. However, there are three application periods so that you don’t have to wait until after March 31, 2022 to submit them all.

  • You can submit a single application between April 1, 2021 and September 30, 2021
  • You can submit a second application between October 1, 2021 and March 31, 2022
  • You can submit a third application between April 1, 2022 and September 30, 2022

If you didn’t submit an application during the first application period, you can submit up to 2 applications in the second application period. If you didn’t submit any applications during the first two application periods, you can submit up to 3 applications during the third application period.

You have until September 30, 2022 to apply.

Save time by applying through your eTaxBC logon

If you have an eTaxBC logon for reporting and paying PST, log on to access the rebate application. When you apply through your logon, the application will auto-fill many of your account details.

Log on to eTaxBC

Apply online without a logon

Apply online

Don't have an eTaxBC logon? Learn more about eTaxBC to see if a logon is right for you and your business.


After you apply

After you submit your application, you’ll receive a confirmation email. Keep a copy of this email so you can refer to it if you have any questions about the status of your application.

Processing times may vary depending on the volume of applications received. Complex applications may take longer to process.

Once your application is approved, you’ll receive an email notification.

Rebate payments are made by direct deposit for all applicants with Canadian bank accounts, and by cheque for applicants without Canadian bank accounts. Payments are generally deposited into your account or mailed out within two weeks of the approval.


Repayments, penalties and interest

You may need to repay all or some of the rebate if you:

If, within two years of purchase (or bringing or sending in, or receipt of the eligible investment), you made a change in use of machinery and equipment so that it was no longer being used substantially (more than 90 percent of the time) for producing or gaining income, you must pay back the amount of the rebate received on the machinery and equipment.

If the machinery and equipment was leased, you must pay back the rebate received for any lease periods where the machinery and equipment was not used substantially (more than 90 percent of the time) for producing or gaining income.

Repayment must be made by the end of the month following the month in which the change in use occurred or, if you are registered to collect PST, by the due date of your next PST return for the period in which the change in use occurred.

You may make your payment by submitting a Casual Remittance Return (PDF, 255KB) or by including the repayment amount as a self-assessment with your next PST return.

If you received a rebate on machinery and equipment, and later return the machinery or equipment to the seller for a credit or refund, you must pay back the amount of the rebate received on the machinery or equipment.

Repayment must be made by the end of the month following the month in which the credit or refund from the seller was received.

You may make your payment by submitting a Casual Remittance Return (PDF, 255KB).

If you received a rebate and discover an error on your application which makes all or some of the rebate amount you received ineligible, you must contact us to advise us of the error.

Your rebate application will be reviewed and a Notice of Assessment will be issued to you indicating the amount that you must repay along with instructions for repayment.

If your rebate application is audited and we identify a rebate amount that must be repaid, you will be issued a Notice of Assessment for the amount due along with instructions for repayment.

 

Penalty and interest charges may apply. For more information, see Bulletin CTB 005 Penalties and Interest (PDF, 196KB).


Appeals

If all or some of the rebate amount you claimed is denied, you may file an appeal to the Minister of Finance. Appeals must be submitted within 90 days from notification of your full or partial denial.

For more information on the appeal process, see Bulletin GEN 002, Appeals (PDF, 211KB).


Need help?

Contact us if you have questions about your application or need help with the application process.

Toll-free

1-877-388-4440 (within Canada)

Monday to Friday, 8:30 am to 4:30 pm, excluding statutory holidays

Email

CTBTaxQuestions@gov.bc.ca