When going to some stores, such as Walmart, there is a sign at every till: If you are tax exempt, please let us know before the first item is scanned.

What qualifies as being tax exempt? Can anyone take advantage of this legally? Or are there strict requirements we'd have to prove?

  • Not sure about Canada, but in the US, state governments often exempt their own agencies from sales tax. If you are a state government employee making purchases on behalf of your employer, they can give you a certificate of sales tax exemption. Then when you run down to Walmart to buy stuff for the office, you show them the certificate, and they don't charge you sales tax. – Nate Eldredge Apr 7 '15 at 22:01
  • @Knuckle-Dragger In Canada business are not people too. – DJClayworth Apr 8 '15 at 1:32
  • I have seen this applied to church groups buying food and supplies for the poor. (in the US) The tellers need to know to be able to fill out some supporting paperwork. – fontophilic Apr 8 '15 at 19:33

The short answer is you're tax exempt if the tax laws say you are. There are a bunch of specific exemptions based on who you are, what you're buying and why.

Taking British Columbia as an example. One exemption is supplies for business use:

Some exemptions are only available to certain purchasers in certain circumstances. These exemptions include:

  • Goods purchased solely for resale or lease
  • Software or telecommunication services purchased solely for resale
  • Goods or software purchased to be incorporated into goods for resale

You can also claim an exemption if you are buying "adult size" clothing for a child under 15 years.

Farmers are exempt from sales tax on various goods and services.

First Nations individuals are exempt in some circumstances.

And so on and so on.

| improve this answer | |
  • 1
    The native status detail is very complex. If you're a retailer, you need to know what the current local practice is inside-out. cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/frstntns/menu-eng.html There are misunderstandings, even with people who have the native status card. Retailers need to take down information carefully to get the money back from the government. – mgjk Apr 8 '15 at 15:47

Note that folks may also be shopping for supplies for a nonprofit tax-exempt organization. I made such a purchase a few weeks ago.

Whatever the legal basis of the exception, you need to be able to prove to the store that you have it. If you can't, they must collect the tax.

| improve this answer | |

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.