Questions and Answers – PST in BC (Contractor)
Question: A friend told me I should be registering for PST. I am a contractor who does electrical work. I sometimes buy supplies as part of my work which I use when I’m doing repairs or replacing parts.
Answer: I’ve had variations of this question a few times. It’s no wonder too as the PST001 Bulletin is kind of cryptic. To find the answer you have to go find a specific Notice related to “Real Property Contractors”.
You are a Real Property Contractor if “under a contract, you construct buildings, or supply and affix or install goods that become improvements to real property or affixed machinery. This includes contractors and subcontractors in the construction industry, as well as other businesses that make improvements to real property under a contract.”
The answer to the question is in Bulletin PST 104 which states “If you are a real property contractor, you are required to pay PST on the goods you purchase, bring, send or receive delivery of in BC for the purposes of fulfilling a contract for the supply and installation of affixed machinery or improvements to real property, unless a specific exemption applies. As a real property contractor, you must pay PST because you are the user of the goods used to fulfil the contract. For the purposes of the PST, supplying and installing goods under a contract to improve real property is NOT a sale of those goods to your customer.“
Tell your friend that, as a real property contractor, you are the user of the goods and, therefore, you don’t have to register and collect PST.