BULLETIN NO. 048
Issued June 1989
Revised March 2004
THE RETAIL SALES TAX ACT
RENTAL OF MACHINERY AND EQUIPMENT
This bulletin explains the application Retail Sales Tax (RST) on the rental of machinery and
• Any charge whatsoever payable by a lessee in connection with the
rental or lease of tangible personal property is subject to tax.
furnishings, apparatus, etc.
• Equipment provided without an operator (i.e. the customer operates the
equipment) is a rental of equipment, and the RST must be collected on
the total charge to the customer, including charges for:
Rental, repair, maintenance, insurance, interest, delivery, pick-up,
termination, cancellation fees, etc.
Assisting the customer to set up and take down the equipment.
Technical support to ensure the equipment functions without
Instruction to the customer’s staff on how to operate the equipment.
Businesses using equipment exclusively for rental to others may
purchase the equipment and any repairs to this equipment exempt
of sales tax by providing their supplier with their RST number.
supplied with an
• Equipment provided by a business along with an operator is regarded
as the provision of a service and not as the rental of equipment.
In this case, the supplier is the consumer of the equipment, repairs,
supplies and other items which they purchase (lease) to provide these
services and must pay the RST thereon. The supplier does not collect
RST on the charge to the customer unless the service is a taxable
service. Taxable services include: repairing, maintaining, installing,
testing, cleaning, etc. of tangible personal property.
• Equipment is considered to be operated by the supplier (a service)
when the supplier accompanies the equipment and controls its
functions during the task or ev