Question:
What is the Provincial Sales Tax (PST) in Saskatchewan?
Facts:
In Canada, there is a federal sales tax called the Goods and Services Tax (GST). Most provinces have combined their federal sales tax with their provincial sales tax to only charge one tax called the Harmonized Sales Tax (HST). However, there are some provinces that still have provincial sales tax: British Columbia, Saskatchewan, Manitoba and Québec.
The Saskatchewan PST has different rules from the GST/HST. Generally, the GST/HST is charged and collected on most products and services (see FAQ Taxable, Zero-Rated and Exempt Supplies for further information) and when GST/HST is paid it can be claimed back on your GST/HST return. The PST in Saskatchewan is generally applied to taxable goods and services consumed or used in Saskatchewan unless there is an exemption. The Saskatchewan PST rate is 6%.
Examples of taxable items: goods for use in Saskatchewan, dry cleaning and laundry services, purchase of computer software, services to or to install tangible personal property, telecommunication services, legal services, veterinary services and accounting and bookkeeping services.
Examples of non-taxable items: basic groceries, reading materials, agricultural equipment and prescription drugs and medicine.
One common PST exemption is on the purchase of goods for resale. Sellers are required to check with the PST Registry that the buyers have a valid PST vendors’ license in order for PST to not be charged on the sale. If the number is not valid, then PST will be charged even if the goods will be resold.
Unlike GST/HST, if you pay Saskatchewan PST you cannot claim it back and offset it against PST collected. Instead, the PST paid becomes part of the expense paid.
Generally, all businesses operating in Saskatchewan are required to register for Saskatchewan PST unless they are considered a small traders business. A small traders business does not have to register for PST if they:
Small traders business does not include sales made at farmers’ markets or online marketplaces or sales to commercial customers. Those businesses would be required to register.
Businesses that are located outside of Saskatchewan but make sales or lease taxable goods in the province of Saskatchewan are required to register. Failure to register, collect or remit the PST could result in penalties and interest charges, as well as the taxes that are due.
If you would like more information on this topic, please contact a member of the Empire CPA team by filling out the contact form below.
Canadian and foreign tax laws are complex and have a tendency to change on a frequent basis. As such, the content published above is believed to be accurate as of the date of this post. Before implementing any tax planning, please seek professional advice from a qualified tax professional. Empire, Chartered Professional Accountants will not accept any liability for any tax ramifications that may result from acting based on the information contained above.
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