British Columbia recently revised Bulletin PST 311,“Promotional Materials and Special Offers,” to clarify how PST applies to taxable promotional materials.
PST is applicable to taxable promotional materials to be given away at no cost at the time of purchase. This is also the case if the purchaser is not certain as to whether the items will be given away or sold.
On the other hand, taxable promotional materials purchased to be sold at a price lower than cost can be purchased exempt from PST. In this case, PST must be charged when the materials are sold. In addition, the initial purchaser is required to self-assess tax on the difference between the purchase and sale prices.
A partial refund is now available for taxable promotional materials initially purchased to be given away for free, but eventually sold. PST Bulletin 400,“Refunds,” has been updated to reflect this change in policy.