PST resale exemption certificate

A buyer of a retail or wholesale business meets this when the deal includes inventory. British Columbia’s Ministry of Finance says PST does not apply to inventory, meaning goods for resale. To buy the seller’s inventory exempt from PST, the purchaser gives the seller a PST number or, if the purchaser has none, a completed Certificate of Exemption – General (FIN 490). See who is liable for a seller’s unpaid provincial sales tax.

How it works

Bulletin PST 208 says a business is exempt from PST on goods it obtains solely for resale or lease to its customers. If a purchase mixes exempt goods with taxable goods for its own use, the bulletin says to tell the supplier which are which and, if the supplier does not charge PST on the taxable goods, to self-assess the PST due. For the separate rule on other assets, see PST on purchase of business assets.

What to ask

• Which PST number or certificate the buyer will give the seller, and whether the buyer is registered before closing
• How the price is split between inventory and the other assets, because the ministry says PST does not apply to inventory
• Whether any supplier charged PST on goods bought for resale; the bulletin sets out how to seek a refund or credit