BC PST Exemptions: Goods, Services and Certificates

Definition

A PST exemption removes an otherwise taxable purchase from the 7% Provincial Sales Tax base. Exemptions fall into two broad categories: item-based exemptions, where the good or service itself is non-taxable regardless of purchaser, and purchaser-based exemptions, where the purchaser's status or use of the good (for example, a reseller or qualifying farmer) removes the PST at the point of sale. Most purchaser-based exemptions require the buyer to provide a valid exemption certificate or registration number to the seller.

Key rules

Major item-based exemptions:

• Food for human consumption, including most restaurant meals, with exceptions including liquor, soda beverages, certain other beverages and edible cannabis products. BC exemption documentation.
• Qualifying prescription drugs, specified medical devices and other listed health products; not every health-related purchase is exempt.
• Children's clothing and footwear.
• Bicycles (with limited exceptions).
• Qualifying books, newspapers and magazines; advertising material and excluded publications require separate treatment.
• Residential electricity, heating fuel, and natural gas (subject to separate ICE Fund tax rules).
• Admissions, memberships, and most personal services.

Major purchaser-based or use-based exemptions:

• Goods purchased solely for resale or lease (exemption claimed by providing the PST number to the supplier, or a Certificate of Exemption, General (FIN 490) if the buyer has no PST number).
• Production Machinery and Equipment (PM&E) exemption for qualifying manufacturing, logging, mining, oil and gas, and certain software development uses. Strict eligibility tests and documentation apply under PST Bulletin 110.
• Farm machinery, equipment, and feed acquired for qualifying agricultural use.
• Qualifying purchases by eligible First Nations individuals or bands on First Nations land, or delivered there by the seller or its carrier, with required status and delivery evidence. Intended use on reserve alone does not establish exemption. BC First Nations exemption.
• Diplomatic and certain government-to-government purchases.

Which services are PST exempt in BC

Most services are not taxable in BC. The Provincial Sales Tax Act taxes goods by default and exempts services by default, so a service is only taxable when the Act names it. The main named ones are legal services, telecommunication services, accommodation, and related services performed on taxable goods such as repair, maintenance and installation. Software counts as a good rather than a service, so packaged software and SaaS used in BC are taxable.

Management and IT consulting, qualifying custom software development, marketing, advertising, design and most health services are generally non-taxable when supplied on their own. A bundle containing taxable goods, software or a taxable service requires its own analysis. Accounting, architectural, engineering, geoscience, security and non-residential real estate services are exempt too. Budget 2026 announced an extension of PST to those six, scheduled for October 1, 2026, and BC paused it on September 18, 2026 with no new date announced.

For the full line, see the next section and BC PST Expansion to Professional Services (Paused). For how PST compares with Saskatchewan and Manitoba, see provincial sales tax rules by province.

Is it a taxable good or an exempt service?

Goods work the other way round from services: buying or leasing a good in BC is taxable unless an exemption applies. That covers new and used goods, business equipment and supplies, and goods brought, sent or delivered into BC for use here. When an out-of-province seller does not charge PST, the buyer self-assesses it, on its PST return if it holds a PST number, or on a Casual Remittance Return (FIN 405) by the last day of the month following the month the goods entered BC if it does not.

Software follows the goods rule. Downloads, cloud software and SaaS are taxable at 7% when used on a device ordinarily situated in BC, wherever the seller is. Custom software developed solely to meet a particular purchaser's requirements can qualify for exemption; pre-existing software, customization and bundled licences have separate conditions. BC software rules. A few named services carry their own rules: accommodation generally attracts 8% PST plus applicable local levies; the long-stay exemption requires at least 27 continuous days, not merely a 27-day invoice, and online marketplace services are taxable. On the paused professional services list, architectural, engineering and geoscience services would have been taxed on 30% of the price and the other three on the full price.

A BC consulting firm invoices a Vancouver client in May 2026 for three lines:

1. Custom software development, 100 hours: $15,000. Exempt custom software, no PST.
2. One-year SaaS subscription to the firm's hosted platform: $3,000. Taxable software, $210 PST.
3. A laptop shipped to the client with the software: $2,000. Taxable good, $140 PST.

GST at 5% applies to all three lines regardless of PST. The invoice total is $20,000 + $1,000 GST + $350 PST = $21,350, and the $350 goes on the firm's next PST return.

PST exemption certificates

Purchaser-based exemptions are claimed at the till, not recovered afterwards. The seller has to be able to show why no PST was charged, so the paperwork is the seller's problem as much as the buyer's.

• Goods for resale. Give the supplier your BC PST number on the purchase order or in a signed declaration. With a PST number there is no separate certificate. A buyer eligible for the resale exemption who is not required to hold a PST number may instead use FIN 490. Small sellers generally pay PST on their resale purchases and cannot use the certificate to bypass that rule.
• Production Machinery and Equipment. Give the supplier a completed Certificate of Exemption (Production Machinery and Equipment, FIN 492) at the time of purchase.
• Qualifying First Nations purchases. Retain the required status evidence and proof the location or delivery conditions are met; a status card alone does not exempt every off-reserve purchase.
• Anything else. The Ministry publishes a certificate for each exemption that needs one. Take the form from the Ministry's exemptions page rather than reusing an old copy, because the required information changes.

If the buyer cannot produce the documentation at the till, the seller charges PST. The Ministry allows the seller to refund or credit that PST if the buyer supplies the required information or documentation within 180 days of the purchase or lease. After that the buyer's route is a refund claim on form FIN 355.

Example

A BC incorporated consulting firm purchases three items for its Vancouver office in 2026:

1. A laptop for employee use: $2,000. Taxable good, no exemption applies (consulting is not PM&E), 7% PST = $140 payable.
2. Office printer paper: $200. Taxable good, no exemption, 7% PST = $14 payable.
3. Prescription medication for an employee (paid by the corporation as part of a health benefit): $150. Item-based exemption (prescription drug), 0% PST.

Contrast with a BC manufacturing corporation buying a $50,000 CNC milling machine that qualifies under the PM&E exemption: the buyer provides a completed Certificate of Exemption (Production Machinery and Equipment, FIN 492) to the supplier at purchase. The supplier does not charge PST, saving $3,500, and retains the certificate for four years as audit support.

For resale purchases, the reseller provides its BC PST number on a purchase order or signed declaration. For example, a Victoria gift shop orders $10,000 of inventory and provides the supplier with PST-1234-5678; the supplier does not charge PST. When the gift shop later sells the items at retail, it charges PST to the final consumer and remits it.

Common mistakes

• Claiming the PM&E exemption without meeting the narrow eligibility tests. PST Bulletin 110 lists specific qualifying activities; general office automation and business software do not qualify.
• Failing to retain the completed exemption certificate. Without documentation, the seller becomes liable for the uncollected PST on audit.
• Assuming that because GST was exempt, PST is also exempt. The two taxes have different exemption lists (for example, residential rent is exempt from both, but consulting services are currently exempt from PST only).
• Missing the four-year window to claim a refund of PST paid in error.
• Charging PST on an exempt service, such as management consulting or custom software development. The client disputes the invoice, and fixing it takes a credit note and a corrected return.
• Missing self-assessment on goods or software bought from an out-of-province seller that did not charge BC PST.

Related concepts

• BC PST Overview
• BC PST Expansion to Professional Services (Paused)
• BC PST Registration
• Taxable, Zero-Rated, and Exempt Supplies