Provincial Sales Tax Act, Part 6 - Exemptions

Section 137 – Taxable Component Sold with Non-Taxable Component for Single Price

PST - SEC.137/Int.

References:

Act: Section 1 "fair market value", "legal services", "liquor", "non-taxable component", "promotional distribution", “soda beverage”, "taxable component", "telecommunication service", “tobacco; Section 26; Section 241

Bulletin PST 316

Interpretation (Issued: 2013/12; Revised: 2023/03)

Effective July 1, 2022, Bill 6, Budget Measures Implementation Act, 2022 adds “tobacco” to section 137(e), to exclude tobacco from the exception to the general bundled sale rules provided by section 26 [purchase price if bundled purchase] (see PSTA/Sec. 26/Int.).

The amendment is consequential to the repeal of section 46.1 of the Tobacco Tax Act effective July 1, 2022, under Bill 6, Budget Measures Implementation Act, 2022 to remove the PST exemption on tobacco. Accordingly, where tobacco of a fair market value of $50 or less is sold bundled with a higher-value non-taxable item, even if all other conditions of section 137 are met, PST will still apply to the tobacco.

Effective April 1, 2021, by B.C. Reg. 56/2021, Bill 4, Budget Measures Implementation Act, 2020 adds “a soda beverage” to section 137(e), to exclude soda beverages from the exemption to the general bundled sale rules provided by section 26 (see PSTA/Sec. 26/Int.).

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 provides under section 137 an exemption from tax, subject to the regulations (currently, nothing is provided), for a taxable component sold with a non-taxable component for a single price when all of the following conditions are met:

(a) the taxable component is sold with a non-taxable component for a single price,

(b) the fair market value of the taxable component is

(i) $50 or less, and

(ii) 10% or less of the fair market value of all the taxable and non-taxable components sold for the single price,

(c) the taxable component is

(i) prepackaged with the non-taxable component, or

(ii) not ordinarily sold by the seller separately from the non-taxable component,

(d) the taxable component is not being provided by way of promotional distribution, and

(e) none of the taxable components sold with the non-taxable components for a single price are liquor, a telecommunication service or legal services.

The exemption provided by section 137 is an exception to the general bundled sale rules provided by section 26 [purchase price if bundled purchase] (see PSTA/Sec. 26/Int.).

Section 138 – Exemption For Minimal Sale Of Tangible Personal Property

PST - SEC.138/Int.

References:

Act: Section 1 "purchase price"

Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 provides under section 138 that sales of tangible personal property at a purchase price of less than 15 cents are exempt from tax imposed under Part 3 [Taxes In Relation to Tangible Personal Property].

Section 139 – Exemptions In Relation To Food

PST - SEC.139/Int.-R.4

References:

PSTERR: Section 52

Bulletin PST 206

Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 provides under section 139 that the following are exempt from tax imposed under Part 3 [Taxes in Relation to Tangible Personal Property]:

(a) food products for human consumption, other than prescribed food products (PSTERR section 52 [exemptions in relation to food – liquor not exempt] provides that liquor is prescribed as excluded from the exemption under section 139);

(b) water in liquid or frozen form.

R.1 Salt (Nacl) (Issued: 2014/04)

Salt for Human Consumption

Salt that is food for human consumption is exempt from PST under paragraph 139(a) [exemptions in relation to food].

Refining Water

Salt that is purchased for use in the process of refining water to be resold (i.e., by municipalities or water districts to remove chemicals that cause hardness) is exempt as a chemical substance under PSTERR section 38 [chemical substances, catalysts and direct agents]. However, if the water that is being refined will not be resold, the exemption under PSTERR section 38 does not apply and the salt is subject to tax. This includes domestic use of salt as a water softener.

Salting Roads

Salt that is purchased for use in salting roads is subject to PST. However, salt becomes an improvement to real property when applied to roads and thus the general rules for real property contractors are used to determine whether the contractor or customer are responsible for payment of the tax.

R.2 Items Exempt As Food For Human Consumption (Issued: 2014/07)

The following items are considered food products for human consumption and therefore are exempt under paragraph 139(a):

• Baby/infant formula
• Brandy sauce
• Cider base
• Cocktail mix
• Food additives and flavours
• Fruit preserved in alcohol
• Hops
• Lecithin
• Malt
• Meal replacement drinks
• Pectin
• Salt and sugar substitutes

This is not a complete list.

R.3 Divider Oils (Issued: 2014/07)

Divider oils that are made of edible products and used to lubricate baking equipment, pans, etc. to prevent dough from sticking qualify for exemption as a food product for human consumption under paragraph 139(a). Although divider oils are not meant to be eaten as-is, they are consumed to an extent when the finished baked good is eaten.

R.4 Decorettes (Issued: 2014/07)

Decorettes and other decorative items made of gum and sugar are food products for human consumption. Although the items are not usually eaten, they are edible.

Section 140 – Exemption In Relation To Fuel

PST - SEC.140/Int.

Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 repealed and replaced section 140.

Section 140 provides that fuel, as defined in the Motor Fuel Tax Act, is exempt from tax imposed under Divisions 2 to 10 and 12 of Part 3 [Taxes in Relation to Tangible Personal Property].

Note: The exemption provided under section 140 does not apply to the 0.4% tax on energy products, also known as the Innovative Clean Energy (ICE) Fund Levy, imposed under Division 11 [Energy Products] of Part 3.

Section 140.1 - Exemption In Relation To Electricity

PSTA - Sec.140.1/Int.

References:

Act: Section 1 “tangible personal property”; Part 3; Section 37; Section 49; Section 52

Interpretation (Issued: 2023/10)

Effective April 1, 2019, Bill 2, Budget Measures Implementation Act, 2017, adds section 140.1. Electricity is exempt from provincial sales tax imposed under Part 3 of the Act, taxes in relation to tangible personal property, for all purchasers.

Before January 1, 2018, tax applied to purchasers of electricity at a rate of 7%, unless a specific exemption applied. As part of the transition to exempting electricity from provincial sales tax, the ministry introduced a lower tax rate of 3.5% on electricity. This lower rate was effective January 1, 2018 until electricity became fully exempt on April 1, 2019.

The Budget Measures Implementation Act, 2017 included additional transitional provisions. For example, the exemption does not apply to the purchase of electricity where the PST becomes due or is paid before April 1, 2019. Additionally, for the purposes of exempting electricity from tax imposed under section 49 [tax if tangible personal property brought into British Columbia for use] or 52 [tax if tangible personal property brought into British Columbia by non-residents], the exemption does not apply to electricity brought or sent into B.C., or where delivery is received in B.C., before April 1, 2019.

Section 141 – Exemptions in Relation to Industry and Commerce

PST - SEC.141/Int.

References:

Act: Section 1 "affixed machinery", "lease", "prototype", "related service", "reusable container", "retail sale", "software", "telecommunication", "telecommunication service"; Part 3; Section 84; Section 84.1; Section 85; Section 89; Section 90; Section 96; Section 99; Section 101; Section 145

PSTERR: Section 1 "Part 3 software"; Section 52; Section 62

PSTR: Section 26; Section 27

Bulletin PST 110; Bulletin PST 209; Bulletin PST 301; Bulletin PST 305

Interpretation (Issued: 2013/12; Revised: 2018/11; 2023/10; 2024/11)

Effective April 1, 2013, Bill 3, Budget Measures Implementation Act, 2024 amended section 141 (1) (g) (i) and (ii) of the Provincial Sales Tax Act (PSTA) by striking out "program". This ensures consistency with an amendment to definition of “software”, which eliminated the word “program” to prevent a narrow interpretation of “software”, as seen in the court case referred to in PST – SEC.1/Software/Int.

The amendment was part of a series of amendments made to clarify the application of tax to software. For more information, see PST - SEC.1/Software/Int.

The amendment was retroactive to April 1, 2013, to clarify that it applies since the reimplementation of the PSTA. 

Effective April 1, 2019, Bill 2, Budget Measures Implementation Act, 2017, amends subsection 141(3) to remove a reference to electricity used in an electrolytic process. This amendment is consequential to the addition of section 140.1, which states that electricity is exempt from tax imposed under Part 3 of the Act.

Effective April 1, 2013, Bill 14, Finance Statutes Amendment Act, 2016 amended subsection 141(1) to make reference to Division 9 [change in use] of the Act. This change clarifies that the change of use provisions apply if TPP that is exempt under section 141 is later used for a non-exempt purpose. The word "solely" was added to paragraphs 141(1)(a), (b), (c), and (d) to affirm the administrative position that the exemption only applies when TPP is purchased in British Columbia, brought or sent into British Columbia or delivered in British Columbia solely for an exempt purpose.

A new paragraph 141(1)(h) is added to provide an exemption for TPP which becomes affixed machinery and is later sold or leased. A new subsection 141(6) provides that a person cannot claim an exemption under paragraph 141(1)(h) if the person retains an interest in the affixed machinery after it is affixed to, or installed in, a building, a structure or land.

The reference to "lease" is removed from subsection 141(4) to ensure exemption under paragraph 141(1)(a) is not lost if a person retains an interest in the tangible personal property after they lease the TPP. Retaining an interest is an inherent characteristic of a lease.

A new subsection 141(5) is added to clarify that the exemption under paragraph 141(1)(c) does not apply to tangible personal property used to perform a related service, if the person who provides the service retains an interest in the TPP after the service has been provided.

Effective April 1, 2013, Bill 8, Budget Measures Implementation Act, 2014 amended section 141 to clarify the application of the exemption to packaging materials and to provide an exemption for TPP that is purchased in BC, brought or sent into BC, or delivered in BC substantially for the purpose of incorporating a software program or telecommunication contained in the TPP into other TPP for the purpose of retail sale or lease or into software or a telecommunication service for the purpose of retail sale.

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 as amended by Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 provides under section 141 certain exemptions in relation to industry and commerce from taxes imposed under Part 3 [Taxes in Relation to Tangible Personal Property].

Note that certain regulations have been made to support elements of section 141:

• TPP prescribed for the purpose of paragraph 141(1)(d) is found in PSTERR subsection 41(1).

• A purpose prescribed for the purpose of paragraph 141(1)(d) is found in PSTERR subsection 41(2).

• A purpose prescribed for the purpose of paragraph 141(1)(e) is found in PSTERR subsection 41(2).

Section 141 – Exemptions In Relation To Industry And Commerce

PST - SEC.141(1)(A)/R.1-R.12

(1)(A) TPP Incorporated Into Other TPP for Retail Sale or Lease

R.1 White Mineral Oil Used As A Sealer On Eggs (Issued: 2014/04)

The purchase of white mineral oil for use as a spray to seal the pores on eggs to enhance their freshness and shelf life qualifies for exemption under paragraph 141(1)(a) as becoming part of the product for resale.

R.2 Nitrogen Induced Into Meat In The Manufacturing Process (Issued: 2014/04)

Nitrogen induced into meat during the manufacturing process which remains in the meat as a preservative qualifies for exemption under paragraph 141(1)(a) as becoming part of the product for resale.

R.3 Coal Dust Control Chemicals (Issued: 2014/04)

Emulsified asphalt, latex and other products purchased and used for the control of coal dust during shipment qualify for exemption under paragraph 141(1)(a) as becoming part of the product for resale.

R.4 Dieselene To Control Dust (Issued: 2014/04)

Dieselene used to control dust of bulk fertilizer during shipment qualifies for exemption under paragraph 141(1)(a) as becoming part of the product for resale.

R.5 Manufacture Of Machinery (Issued: 2014/04)

Grease, lubricating oil, hydraulic fluid, transmission fluid and anti-freeze incorporated into machinery being manufactured for resale qualifies for exemption under paragraph 141(1)(a) as becoming part of the product for resale.

R.6 Xylene Injected Into The Hydrocarbon Mix (Natural Gas And Condensate) In The Production Of Natural Gas (Issued: 2014/04)

Xylene is injected into the hydrocarbon mix of natural gas and condensate to prevent asphaltanes from precipitating out of the hydrocarbon mix and plugging the processing equipment. The xylene also causes the condensate to meet the pipeline sales specifications. As the xylene becomes part of the condensate which is subsequently sold, it qualifies for exemption under paragraph 141(1)(a).

R.7 Genetic Animal Material (Embryo And Semen) Used In Breeding (Issued: 2014/04)

Genetic animal material (embryo and semen) qualifies for exemption under paragraph 141(1)(a) when the material is used to breed an animal which is to be sold. The genetic material is used, in part, to determine the characteristics of the animal and is therefore considered to have been incorporated into the animal. However, where the genetic material is purchased to produce an animal for the purchaser's own use, for instance for slaughter or breeding, the sale of the genetic material is subject to tax.

R.8 Raw Logs (Issued: 2014/04)

Raw logs purchased to be used to produce other TPP that will be sold qualify for exemption from tax under paragraph 141(1)(a).

Raw logs purchased to build log homes do not qualify for the exemption if the purchaser assembles the log home on a piece of land and sells the home and land. To qualify for the exemption under paragraph 141(1)(a) the raw logs must be incorporated into other TPP that will be resold. Since an assembled log home does not qualify as TPP, the raw logs purchased and used to construct them do not qualify for exemption under paragraph 141(1)(a).

However, if section 79 [contractor exempt from tax under section 37 or 49] applies (i.e., the contractor and purchaser have an agreement stating the customer is liable for the tax), the contractor can purchase the raw logs exempt of tax, but must charge and collect tax on the purchase price of the logs (as provided under section 11 [purchase price of tangible personal property related to affixed machinery and improvements to real property]).

R.9 Tree Seedlings (Issued: 2014/04)

Tax applies to tree seedlings that are planted and grown for the purpose of processing the trees into lumber or into cut Christmas trees for resale. The purchase of such seedlings is not eligible for exemption under paragraph 141(1)(a). To qualify for this exemption, the TPP must be processed, fabricated or manufactured into, attached to or incorporated into other TPP for the purpose of retail sale. A tree seedling that is planted and left to grow for a number of years before being cut for Christmas trees or for lumber has not been used for the purpose of processing it into other TPP.

This is different from genetic animal material used in breeding where the semen and embryo are incorporated into the animal to produce something else - another animal (see PSTA/Sec. 141(1)(a)/R.7).

For purchases of tree seedlings by qualifying farmers, however, tree seedlings may qualify for exemption if they are obtained for use solely for a farm purpose, including seedlings grown into Christmas trees on farm land. See PSTERR/Schedule. 2/Table 14/Item 29.

R.10 Polish Used On Vehicles Held For Resale (Issued: 2014/04)

Cut polish is a fine abrasive cream or paste used to clean oxidized paint prior to waxing or polyglycoating. Cut polish does not form a component part of the vehicle. Tax must therefore be paid on cut polish acquired for cut polishing vehicles held in resale inventory.

Wax polish, on the other hand, does form a component part of the vehicle. Such polish stays on the vehicle and is not removed before the sale. Wax polish applied to vehicles held for resale qualifies for exemption under paragraph 141(1)(a).

R.11 Embroidery Backing Paper (Issued: 2014/04)

Backing paper used to stabilize embroidered fabric qualifies for exemption under paragraph 141(1)(a), provided the embroidered item is for retail sale. This paper performs its initial stabilizing function during the process of machine embroidery. Part of the paper is then removed from the fabric, while another part remains with the item after its retail sale. The portion that remains after retail sale, although it may be small, continues to serve a stabilizing function during the use of the embroidered item by the final consumer.

Backing paper may occasionally be used for purposes other than stabilizing embroidered fabric. For example, it may be used to create a pattern for the layout of garment panels on an embroidery table. This use does not qualify for exemption under paragraph 141(1)(a).

R.12 DVD Cases (Issued: 2014/04)

DVD rental providers generally purchase DVD cases in bulk. They use these cases to protect a DVD when it is leased to their customers.

Although the DVD case is a reusable container, section 101 [tax on reusable containers] does not apply because that section only applies to TPP that is sold and not TPP that is leased.

The DVD provider can purchase the DVD cases exempt from PST under paragraph 141(1)(a) as TPP purchased for the purpose of packaging the DVDs for lease to their customers.

Section 141 – Exemptions In Relation To Industry And Commerce

PST - SEC.141(1)(B)/R.1-R.2

(1)(B) Labels

R.1 Materials Used To Self-Manufacture Labels (Issued: 2014/04)

Self-manufactured labels are not exempt from tax under paragraph 141(1)(b) because the exemption requires the labels to be purchased or brought into BC by the labeler. Self-manufactured labels are not purchased, but made, and therefore do not qualify for this exemption.

However, materials to self-manufacture labels may be purchased exempt from tax provided the labels are sold or attached to a product for sale or lease, under paragraph 141(1)(a).

If the manufacturer is the consumer or user of the labels, and this exemption does not apply, then the manufacturer must pay tax on the materials it uses to make the labels.

R.2 Printer Ribbons (Issued: 2014/04)

Printer ribbons are not exempt under paragraph 141(1)(b) because printer ribbons are not labels.

Printer ribbons are also not exempt under paragraph 141(1)(a), which exempts TPP incorporated into or attached to other TPP for sale or lease, because the ribbon itself is not incorporated or attached into the label it is used to print.

However, an eligible manufacturer of labels or other printed products may be able to purchase printer ribbons exempt from tax under PSTERR section 92 [manufacturing].

Section 141 – Exemptions In Relation To Industry And Commerce

PST - SEC.141(1)(C)/R.1

(1)(C) TPP Used in the Course of Providing a Related Service

R.1 Laundry Chemicals Used In Uniform And Linen Rentals And Sales (Issued: 2014/04)

The following chemicals used in washing uniforms and linen that will be sold or leased qualify for exemption because they remain with the clothing after the wash (this is not a complete list):

• dye - adds colour back to linen

• fabric conditioner - fights growth of mildew in linen

• fabric softeners

• starches

Section 141.1 - Exemption for Affixed Machinery

PST - SEC.141.1/Int.

References:

Act: Section 1 "affixed machinery", "lease"

Bulletin PST 500; Bulletin PST 501; Bulletin PST 503

Interpretation (Issued: 2017/05)

Effective April 1, 2016, Bill 14, Finance Statutes Amendment Act, 2016 created a new section 141.1 to provide an exemption for TPP that is leased for the sole purpose of making the TPP affixed machinery which is re-leased to others.

Section 142 – Exemptions For Tangible Personal Property Intended For Lease

PST - SEC.142/Int.

References:

Act: Section 1 "lease", "lessee"; Section 82; Section 83; Section 88; Section 102; Section 145

PSTERR: Section 63

Bulletin PST 315

Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 as amended by Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 provides under section 142 exemptions from the tax on purchases and leases of tangible personal property intended for lease.

Subsection 142(1) provides that a purchaser of tangible personal property is exempt from tax imposed under Part 3 [Taxes in Relation to Tangible Personal Property] on the purchase if the purchaser purchases the tangible personal property for the purpose only of leasing the property to other persons.

Subsection 142(2) provides that a lessee of tangible personal property is exempt from tax imposed under Part 3 [Taxes in Relation to Tangible Personal Property] on that lease if the lessee leases the tangible personal property for the purpose only of re-leasing the property to other persons.

Subsection 142(2.1) provides that a person who brings or sends into British Columbia, or receives delivery of in British Columbia, tangible personal property is exempt from tax imposed under Part 3 in respect of the bringing or sending into, or delivery in British Columbia, of the tangible personal property if the person brought or sent into British Columbia, or received delivery of in British Columbia, the tangible personal property for the purpose only of leasing the property to other persons.

Subsection 142(3) provides that the exemption under subsection 142(1), 142(2) or 142(2.1) does not apply to a person if the person is granting to other persons a right to use the tangible personal property under an agreement in which

(a) the right to use the tangible personal property is not the main purpose of the agreement, and

(b) a separate price is not specified for the right to use the tangible personal property.

Subsection 142(4) provides that a purchaser of tangible personal property is exempt from tax imposed under Part 3 on the purchase if the purchaser

(a) purchases the tangible personal property solely for the purposes of

(i) leasing the property to other persons, and

(ii) occasionally, under an agreement, supplying the property with a person to operate it, and

(b) capitalizes the tangible personal property as lease inventory in the purchaser’s business accounting records.

Subsection 142(5) provides that a person who brings or sends into British Columbia, or receives delivery of in British Columbia, tangible personal property is exempt from tax imposed under Part 3 in respect of the bringing or sending into British Columbia, or delivery in British Columbia, of the tangible personal property if the person

(a) brought or sent into British Columbia, or received delivery of in British Columbia, the tangible personal property solely for the purposes of

(i) leasing the property to other persons, and

(ii) occasionally, under an agreement, supplying the property with a person to operate it, and

(b) capitalizes the tangible personal property as lease inventory in the person’s business accounting records.

Section 143 – Exemption In Relation To Recording Of Motion Picture Or Audio Production

PST - SEC.143/Int.-R.2

References:

Act: Section 87; Section 89; Section 90; Section 145

Interpretation (Issued: 2013/12; Revised: 2017/05)

Effective April 1, 2013, Bill 14, Finance Statutes Amendment Act, 2016 amended section 143 to add a cross reference to Division 9 of Part 3 [change in use] of the Act. This ensures that the change of use rules apply if the recording of a motion picture or audio production is used for a non-exempt use.

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 as amended by Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 provides under section 143 that subject to subsection 89(2) [tax on acquisition of eligible tangible personal property] and subsection 90(4) [tax on eligible tangible personal property brought into British Columbia], a recording of a motion picture production or of an audio production is exempt from tax imposed under Part 3 [Taxes in Relation to Tangible Personal Property] if the recording is brought or sent into British Columbia, delivered in British Columbia, purchased or leased for the purpose of

(a) public broadcast by a licensed radio or television broadcaster,

(b) making copies for

(i) public broadcast by a licensed radio or television broadcaster,

(ii) public exhibition in a movie theatre or other public venue, or

(iii) sale or lease, or

(c) copying into another recording of a motion picture production or of an audio production for

(i) public broadcast by a licensed radio or television broadcaster,

(ii) public exhibition in a movie theatre or other public venue, or

(iii) sale or lease.

R.1 Licensed Broadcaster (Issued: 2014/04)

The reference to a "licensed radio or television broadcaster" in section 143 refers to a radio or television broadcaster that is licensed to broadcast by the Canadian Radio-television and Telecommunications Commission (CRTC).

R.2 Making Copies For Sale Or Lease (Issued: 2014/04)

Section 143 provides an exemption for recordings of motion pictures or audio productions acquired for the purpose of making copies for sale or lease.

If a person purchases a motion picture recording and dubs the recording (e.g., into a different language) to form a new master recording before making copies for sale or lease, the original purchase still qualifies for exemption. The intermediary step of dubbing the recording does not disqualify the purchase of the recording from exemption, provided the master is made for the purpose of making copies for sale or lease.

Section 144 – Limit On Exemptions

PST - SEC.144/Int.

References:

Act: Section 1 "software"

Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 provides under section 143 the following general limitations on exemptions.

Subsection 144(1) provides that an exemption provided under the Act for tangible personal property does not apply to tangible personal property used to make that property.

Subsection 144(2) provides that an exemption provided under the Act for software does not apply to

(a) tangible personal property used to develop or make that software, or

(b) software used to develop or make that software.

Section 145 – Evidence Required To Claim Certain Exemptions

PST - SEC.145/Int.

References:

Act: Section 1 "collector", "software", "taxable service"; Section 113; Section 141; Section 142; Section 143; Section 147; Section 153; Section 203

PSTERR: Section 9; Section 14; Section 24; Section 25; Section 26; Section 29; Section 31; Section 33; Section 46; Section 48; Section 49; Section 55; Section 62; Section 63; Section 64; Section 66; Section 68.1; Section 70; Section 72.1; Section 73; Section 74; Section 75; Section 76; Section 77; Section 78; Section 81; Section 88.1; Section 118; Section 119

PSTR: Section 86; Section 88

Interpretation (Issued: 2013/12; Revised: 2018/11)

Effective April 1, 2013, Bill 14, Finance Statutes Amendment Act, 2016 amended paragraph 145(1)(a) to add a cross reference to the new section 141.1. This reference ensures that the documentation requirements to claim an exemption apply when a person leases goods that become affixed machinery which is re-leased to others.

Effective March 25, 2015, Bill 13, Finance Statutes Amendment Act, 2015 amended paragraph 145(1)(a) to add a cross reference to section 140. This amendment clarifies that subsection 145 (1.1) also applies in relation to fuel that a person alleges is exempt under section 140. The reference to section 140 was specifically added to allow the director to require FIN 449.

The amendment also added new subsections (1.2) and (3) to clarify that subsections 145 (1.1) and 145 (2) do not apply if the collector is not required by the regulations or the director to obtain declarations, information or documents in respect of the tangible personal property, software or taxable services that the person alleges is exempt from tax.

Accordingly, if the regulations and the director do not require information or documentation, the collector may provide an exemption at the time of sale.

The amendment to subsection 145 (2) clarifies the reference to Part 5 by more specifically referring to "a provision of Part 5."

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 as amended by Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 provides under section 145 the requirement for a collector to obtain evidence when certain exemptions are being claimed.