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This Act is current to January 17, 2018
See the Tables of Legislative Changes for this Act’s legislative history, including any changes not in force.

Provincial Sales Tax Act

[SBC 2012] CHAPTER 35

Part 6 — Exemptions

Taxable component sold with non-taxable component for single price

137  Subject to the regulations, a taxable component is exempt from tax imposed under this Act if

(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.

Exemption for minimal sale of tangible personal property

138  Sales of tangible personal property at a purchase price of less than $0.15 are exempt from tax imposed under Part 3.

Exemptions in relation to food

139  The following are exempt from tax imposed under Part 3:

(a) food products for human consumption, other than prescribed food products;

(b) water in liquid or frozen form.

Exemption in relation to fuel

140  Fuel, as defined in the Motor Fuel Tax Act, is exempt from tax imposed under Divisions 2 to 10 and 12 of Part 3 of this Act.

Exemptions in relation to industry and commerce

141  (1) Subject to subsection (1.1) and sections 89 (2) [tax on acquisition of eligible tangible personal property] and 99 (6) [tax on acquisition of exclusive product by independent sales contractor], the following are exempt from tax imposed under Part 3, other than Division 9 [Change in Use] of that Part:

(a) subject to subsections (2) to (4) of this section, tangible personal property that is purchased in British Columbia, brought or sent into British Columbia or delivered in British Columbia

(i) solely for the purpose of being processed, fabricated or manufactured into, attached to or incorporated into, or

(ii) solely for the purpose of packaging

other tangible personal property, other than prescribed tangible personal property, for the purpose of retail sale or lease;

(b) labels that are purchased in British Columbia, brought or sent into British Columbia or delivered in British Columbia solely for the purpose of being attached to tangible personal property held for sale or lease and that are intended to remain with the tangible personal property after it is sold or leased;

(c) subject to subsections (3) and (5), tangible personal property that is purchased in British Columbia, brought or sent into British Columbia or delivered in British Columbia solely for the purpose of being used in the course of providing a related service to other tangible personal property and that remains part of, or attached to, the other tangible personal property after the service has been provided;

(d) subject to subsection (3), tangible personal property, other than prescribed tangible personal property, that is purchased in British Columbia, brought or sent into British Columbia or delivered in British Columbia solely for the purpose of being attached to or processed, fabricated, manufactured or incorporated into a prototype, or copies of the prototype made for a prescribed purpose, if the prototype is a result of research and development activities aimed at developing a new or improved product or a new or improved process;

(e) a prototype or, if made for a prescribed purpose, a copy of a prototype if the prototype or copy is a result of research and development activities aimed at developing a new or improved product or a new or improved process;

(f) [Repealed 2013-1-254.]

(g) tangible personal property that is purchased in British Columbia, brought or sent into British Columbia or delivered in British Columbia substantially for the purpose of

(i) incorporating any software program or telecommunication contained in the tangible personal property into other tangible personal property for the purpose of retail sale or lease, or

(ii) incorporating any software program or telecommunication contained in the tangible personal property into software or a telecommunication service for the purpose of retail sale;

(h) subject to subsection (6), tangible personal property that is purchased in British Columbia, brought or sent into British Columbia or delivered in British Columbia solely for the purpose of

(i) being affixed to, or installed in, a building, a structure or land so that the tangible personal property will become affixed machinery on being affixed or installed, and

(ii) retail sale or lease.

(1.1) The exemptions under subsection (1) do not apply to tangible personal property that is leased.

(2) The exemption under subsection (1) (a) does not apply to a reusable container subject to tax under section 101.

(3) If tangible personal property, other than electricity used in an electrolytic process, is used to produce energy or is used as a source of energy, the exemption under subsection (1) (a), (c) or (d) does not apply to the tangible personal property.

(4) The exemptions under subsection (1) (a) do not apply if the person who purchased in British Columbia, brought or sent into British Columbia or received delivery of in British Columbia the tangible personal property that is used

(a) for the purpose of being processed, fabricated or manufactured into, attached to or incorporated into, or

(b) for the purpose of packaging

other tangible personal property for the purpose of retail sale is to retain an interest in the tangible personal property after the retail sale.

(5) The exemption under subsection (1) (c) does not apply if the person who purchased in British Columbia, brought or sent into British Columbia or received delivery of in British Columbia the tangible personal property that is used in the course of providing a related service to other tangible personal property is to retain an interest in the tangible personal property after the service has been provided.

(6) The exemption under subsection (1) (h) does not apply if the person who purchased in British Columbia, brought or sent into British Columbia or received delivery of in British Columbia the tangible personal property that is affixed to, or installed in, a building, a structure or land so that it becomes affixed machinery for the purpose of retail sale is to retain an interest in the tangible personal property after the retail sale.

Exemption for affixed machinery

141.1  A lessee of tangible personal property is exempt from tax imposed under Part 3 on the lease if the lessee leases the tangible personal property solely for the purpose of

(a) affixing the tangible personal property to, or installing the tangible personal property in, a building, a structure or land so that the tangible personal property will become affixed machinery on being affixed or installed, and

(b) re-leasing the tangible personal property to other persons.

Exemptions for tangible personal property intended for lease

142  (1) A purchaser of tangible personal property is exempt from tax imposed under Part 3 on the purchase if the purchaser purchases the tangible personal property for the purpose only of leasing the property to other persons.

(2) A lessee of tangible personal property is exempt from tax imposed under Part 3 on that lease if the lessee leases the tangible personal property for the purpose only of re-leasing the property to other persons.

(2.1) 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 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.

(3) The exemption under subsection (1), (2) or (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.

(4) 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.

(5) 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.

Exemption in relation to recording of motion picture or audio production

143  Subject to sections 89 (2) [tax on acquisition of eligible tangible personal property] and 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], other than Division 9 [Change in Use] of that Part, 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.

Limit on exemptions

144  (1) An exemption provided under this Act for tangible personal property does not apply to tangible personal property used to make that property.

(2) An exemption provided under this 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.

Evidence required to claim certain exemptions

145  (1) Subsection (1.1) applies to a collector if the collector sells tangible personal property at a sale in British Columbia, leases tangible personal property, sells software or causes the tangible personal property or software to be delivered in British Columbia to a person who alleges that

(a) the tangible personal property is exempt under section 140, 141, 141.1, 142 or 143 or under prescribed provisions of the regulations from tax imposed under Part 3, or

(b) the software is exempt under section 113 (1) or under prescribed provisions of the regulations from tax imposed under Part 4.

(1.1) A collector to whom this subsection applies must nevertheless levy and collect the tax under Part 3 or 4 in respect of the tangible personal property or software unless the collector obtains from that person, at or before the time the tax is payable,

(a) a declaration in a form acceptable to the director, if required by the regulations,

(b) any information or document required by the regulations, and

(c) any information or document required by the director.

(1.2) Subsection (1.1) does not apply if, in respect of the tangible personal property or software that the person alleges is exempt from tax, the collector is not required under paragraph (a), (b) or (c) of that subsection to obtain any declarations, information or documents.

(2) If a collector provides a taxable service to a person who alleges that the taxable service is exempt under a provision of Part 5 or under prescribed provisions of the regulations from tax under a provision of Part 5, the collector must nevertheless levy and collect the tax under that Part unless the collector obtains from that person, at or before the time the tax is payable,

(a) a declaration in a form acceptable to the director, if required by the regulations,

(b) any information or document required by the regulations, and

(c) any information or document required by the director.

(3) Subsection (2) does not apply if, in respect of the taxable service that the person alleges is exempt from tax, the collector is not required under paragraph (a), (b) or (c) of that subsection to obtain any declarations, information or documents.

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