Changes to the Saskatchewan Provincial Sales Tax

The Saskatchewan Budget introduced in March 2017 changed the scope of the services that PST is to be charged on with most changes already effective as of April 1 2017.

There are also changes you need to be aware of effective July 1, 2017.

Summary of Changes to Saskatchewan PST

  • PST increases from 5% to 6%
  • PST base is expanded to insurance premiums, effective for premium payment due dates on or after July 1, 2017 (including life, accident, health, property, vehicle, liability, casualty, and agricultural insurance)
  • PST exemptions are eliminated for children’s clothing, restaurant meals, and snack food
  • PST is payable on contracts for the repair, renovation or improvement of real property, effective for contracts entered on or after April 1, 2017
    • Contractors will be eligible to acquire tax-free building materials for use in fulfilling the contract
  • The province has changed how PST on the purchase of used vehicles is being calculated.

Real Property

The largest change was to services to real property. Prior to April 1, 2017, labour charges relating to the construction, alteration, repair, erection, remodeling or improvement of real property were not subject to tax.

As of April 1, 2017, a contractor engaged in services to real property is required to become a Licensed Vendor and collect PST on the total charge to the customer for the services, including all charges for:

  • Labour
  • Materials
  • Transportation
  • Insurance
  • Service fees
  • Overhead expenses

PST must be shown as a separate line item on the invoice to the customer. PST is also payable on any tax, levy or duty, other than the GST.

Food and Beverages

There were also changes to food and beverages as of April 1.

Restaurant meals and other food and beverage items are subject to Provincial Sales Tax (PST) on the same basis as the Goods and Services Tax (GST).

The PST exemption previously provided for many food and beverage items, such as snack foods and prepared meals, has been removed.

Insurance

There will be a change to insurance to be implemented on August 1.

After consultations with insurance industry associations, the Government of Saskatchewan has extended the effective date for the application of Provincial Sales Tax (PST) to insurance premiums from July 1, 2017, to August 1, 2017.

PST of 6% applies to all insurance premiums with an effective date on or after August 1, 2017, sold by any company, agency or group, where the insured person or business is a resident of Saskatchewan or the insurance contract is in respect of property located in Saskatchewan.

Filing Frequency

Depending on the amount of tax collected, you may need to file as often as monthly.

Return periods are based on the amount of tax collected as follows:

Tax collections or tax payable

Return Period

0-$3,600 per year

Annual

$3,600 - $7200 per year

Quarterly

greater than $7,200 per year

Monthly

Input Tax Credits

There are no input credits allowed in Saskatchewan for PST. The tax is payable on all business-use goods, other than goods purchased for resale. There are input tax credits for GST for goods consumed by a business.

More information can be found on the Government of Saskatchewan - Finance department’s website.

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