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The supplier is responsible for charging and collecting PST. If, however, the goods or services are purchased for resale, the supplier is not required to charge PST on the basis of the purchaser’s licensed PST registration number. Most provinces, however, require that the supplier maintain a PST exemption certificate for customers who claim exempt status.

PST is payable by the ultimate consumer and is levied only once (except in Quebec). For example, the purchase of office supplies by a manufacturer for its own consumption is subject to PST, but office supplies purchased for resale are not.

Provincial taxes paid to the purchaser are not recoverable and therefore become part of the cost of the goods and services purchased (except in Quebec).

Sales of goods that are delivered by the supplier to destinations outside the province are exempt from PST within the province where the supplier is located; however, these goods are subject to PST in the province where they are consumed. If a company ships goods to three provinces, that company must comply with the collection and remittance of three different provincial sales taxes (where applicable) to each of the three provincial tax authorities.

Note: This example assumes that the supplier has a registered permanent establishment in each ship-to province. If the supplier is not registered in the ship-to province, no provincial sales tax is charged on the sale to that province. In this case, the customer is required to self-assess and remit the applicable provincial sales tax.

There might be a situation when a supplier not only sells to a PST-exempt distributor (who then sells to the ultimate consumer, responsible for PST), but also sells directly to the same consumer as the distributor.

For example, when Madewell, Inc bills and ships goods to PST-exempt Value Hardware, no PST applies. If, however, Value Hardware resells to Best Cleaning Supplies, it is Value Hardware’s responsibility to charge PST. Similarly, no PST applies if Madewell, Inc sells to and bills Value Hardware, but ships directly to Best Cleaning Supplies (on behalf of Value Hardware).

If, however, Madewell, Inc also sells directly to Value Hardware (whose ship-to location is one of the supplier’s permanent establishments), Madewell must charge PST on the direct sale to Best Cleaning Supplies. Because the ship-to location is the same (Best Cleaning Supplies), there is no PST when the supplier bills Value Hardware. The PST does apply, however, when the supplier bills Best Cleaning Supplies.