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    Tuesday, September 30, 2014
The Saskatchewan Advantage

What is the policy regarding PST on the sale of vehicles?

Effective November 8, 2007, used light vehicles became tax exempt.  To qualify for this exemption, a vehicle must have had the PST previously paid in full on it and it must fall into one of the following categories:

- Cars;

- Sport utility vehicles;

- Light vans (mini-vans, passenger vans and cargo vans that are rated "one ton" or less); and,

- Light trucks (quarter ton, half ton, three-quarter ton and one ton trucks).

Excluded from the exemption are heavy vehicles, buses, trailers, motor homes, motorcycles, mopeds and leisure vehicles such as ATV's, snowmobiles and boats.

The taxable value on dealer sales is calculated on the cash difference which is the purchase price less the trade-in.

Please see the following bulletin for details of this tax exemption: Notification of a Change in the Application of Tax to Used Light Vehicles

The $3,000 reduction from the value for tax purposes applies to private sales of taxable vehicles and recreational vehicles only.  Vehicles registered for commercial use in class LV or in any other class do not receive the reduction.  Vehicles registered in class F, farm vehicle, regardless of use, are allowed the $3,000 reduction on private sales only.  Vehicles imported from outside the country do not qualify for the reduction.

On taxable private sales the taxpayer is allowed the greater of the $3,000 deduction or the trade-in value, but not both.  At the time of registration, the taxpayer should notify the SGI issuer of their election.

Vehicles sold to Status Indians are exempt from tax only when the sale is finalized on the reserve and the vehicle is delivered to the reserve.

The greater of the purchase price or Red Book wholesale value is used in determining the tax on taxable private sales.  In situations where an individual paid less for the vehicle than the Red Book value, Saskatchewan Finance will provide a refund upon receiving proof of the actual purchase price.  Presentation of a cancelled cheque or similar documentation is usually sufficient for Saskatchewan Finance to process a refund.

What is Provincial Sales Tax (PST)?

The Provincial Sales Tax is a 5% sales tax that applies to taxable goods and services consumed or used in Saskatchewan. It applies to goods and services purchased in the Province as well as goods and services that are imported for consumption or use in Saskatchewan. The GST is excluded in calculating the amount of PST payable.

The PST applies to the purchase or rental of new and used tangible personal property. The following services are also subject to PST: telecommunication services, cable television, telephone answering services, accommodation, repair or installation labour, legal services, laundry and drycleaning services, security and investigation services, credit reporting and account collection services, real estate commissions, commercial building cleaning services, accounting services, engineering and architectural services, veterinary services, computer services, employment placement services and advertising services.

Do I need a Vendor's Licence?

Anyone selling taxable goods or services in Saskatchewan is required to obtain a vendor's licence.

I provide services only, do I need to become licensed and collect tax?

Businesses selling taxable services in Saskatchewan must become licensed as vendors and collect tax.

Taxable services include the following: telecommunication services, telephone answering services, cable television, accommodation, repair or installation labour, legal services, laundry and drycleaning services, security and investigation services, credit reporting and account collection services, real estate commissions, commercial building cleaning services, accounting services, engineering and architectural services, veterinary services, computer services, employment placement services and advertising services.

Do businesses that provide non-taxable services need to be licensed?

Businesses providing non-taxable services are not required to be licensed as vendors or collect tax on the services provided. However, a business selling non-taxable services is required to become registered as a consumer, and is responsible for paying tax on equipment and supplies used to provide their services. The tax must be paid to the supplier. If the tax is not paid to the supplier, the tax must be self-assessed and remitted with the consumer's regular tax return.

Are construction contractors required to be licensed?

A business that performs supply and install contracts (goods that are permanently attached to a building, such as carpet, painting, plumbing, electrical or building construction or renovations) is required to become registered as a consumer. Tax should not be billed to or collected from the contractor's customers on the materials or labour charges used in carrying out a supply and install contract. Contractors are considered to be the consumers of the material used to carry out these contracts. As such, a contractor is required to pay the tax on the cost of the materials used. The tax paid by the contractor on supplies and materials may be included in the amount billed to the customer, but the tax should not be listed or collected as a separate charge to the contractor's customers. Even though contractors do not collect tax from their customers, they are required to become registered as a consumer and obtain a Registered Consumer Permit number.

How do I apply for a Vendor's Licence or a Registered Consumer Permit number?

An application form is available on the Internet, can be mailed or faxed to you, or completed over the phone. A vendor's licence or consumer number will be forwarded in the mail within one week. Licences can be issued immediately by completing the form at our Regina office.

Application forms are available here, or call 1-800-667-6102.

What does a vendor's licence number allow me to do?

A vendor's licence number allows you to purchase inventory and taxable services that are for resale without paying tax by providing your supplier with your vendor's licence number. Non-returnable packaging materials may also be purchased tax-exempt by providing your supplier with the number. You may not purchase goods or services tax-exempt for your personal use or for use in operating your business by quoting your vendor's licence number.

What are the tax implications of purchasing another business or buying used assets from another business?

In order to avoid possible liability for unpaid PST, before finalizing the purchase or sale of a business, a clearance certificate should be obtained from Saskatchewan Finance indicating that all tax has been accounted for by the business. To obtain a clearance certificate, please call 1-800-667-6102 Extension 0602. PST is payable on taxable assets that are acquired from another business. A Business Assets Declaration form must be completed and a copy of the agreement for sale must be submitted to Saskatchewan Finance.

Businesses that dispose of goods or equipment used in their business, such as office equipment, furniture, machinery, tools, construction equipment, etc., are required to collect PST on the selling price of these items.

Are out-of-province purchases of equipment and supplies for business use subject to PST?

The tax must be paid on all new or used equipment and supplies that are purchased for business use. The tax must be self-assessed and remitted with a return form if the tax is not paid to the supplier. Only inventory that is purchased for resale may be purchased tax exempt.

Are out-of-province purchases by individuals subject to PST?

Residents purchasing taxable goods by e-commerce, mail order or while travelling outside Saskatchewan are required to report and remit the PST directly to the Ministry of Finance, unless it has been paid to the Canada Border Services Agency upon entry into Saskatchewan or to another agent licensed to collect the PST.

To report tax payable, please complete the Provincial Sales Tax form, "Casual Return 31D" which is available online via the following link http://finance.gov.sk.ca/forms/provincialsalestaxforms/CasualReturn.pdf and submit a copy of the form along with payment to the Ministry of Finance.

If you have questions or require assistance please contact our office via;

- Email       sask.tax.info@gov.sk.ca

- Phone     1-800-667-6102

- Fax           306-798-3045

- Mail          Box 200,  Regina, SK S4P 2Z6            

Can non-residents purchase goods and services tax-exempt in Saskatchewan?

With the exception of vehicles, a non-resident is required to pay PST on all goods that are purchased in Saskatchewan. The goods are exempt from tax only when the retailer ships the goods to the purchaser outside the Province. Refunds are not available for non-residents who remove goods purchased in Saskatchewan. A non-resident certificate must be completed by a non-resident in order to purchase vehicles without the payment of PST. These certificates are available from motor vehicle dealers.

When are tax returns due?

Returns are due 20 days following the end of the return period. If returns are not submitted by the due dates, penalty and interest charges will apply to the net tax payable. In addition, the vendor's commission will be forfeited. If the due date falls on a weekend or holiday, it changes to the next business day.

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

How do I indicate the PST on my invoices?

The customer's receipt must show the PST as a separate amount when invoicing a retail sale. You may not show a tax-inclusive lump sum on the receipt. Although you may advertise that the tax is included in your prices, the tax must be shown separately on your invoices.

Tax applies on the selling price of the item or services excluding the GST.

I moved into the Province. Are my belongings taxable?

Persons who have been a full time resident outside of Saskatchewan for at least six months (extended vacations don't count) may bring their personal effects into the Province without paying tax. Eligible personal effects must be brought into Saskatchewan within six months from the date the person takes up residence. This exemption is not applicable to business assets or rented personal effects.

Am I allowed to recover the tax portion of my bad debts?

The tax portion of uncollectible accounts may be claimed as a deduction from the PST to be remitted by a vendor. The write off only applies to that portion of the sale that was not collected and not the total sale. In order to claim a deduction, the bad debt must be written off of the vendor's books. The vendor may deduct the tax portion of his or her bad debts from a future return. A tax credit may only be claimed within four years of the amount being written off of the vendor's books.

I am a non-resident vendor making sales into the Province. Do I have to collect tax on my sales?

All persons making taxable sales in Saskatchewan should become licensed and collect the tax. Non-resident businesses should consider becoming licensed as a convenience to their customers. If non-resident businesses don't collect PST at the time of sale, their customers are required to self assess and remit the tax.

I am a non-resident contractor that is considering bidding a job in Saskatchewan. How does PST apply?

Non-resident contractors are required to become registered and pay tax on equipment used in carrying out their contracts in Saskatchewan. Tax is payable on the contractor’s cost of all materials and supplies used to complete each contract. Formulas are used to calculate the pro-rata amount of tax owing on equipment.

Are there input tax credits for PST for goods consumed by a business similar to the credit that is allowed for GST purposes?

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

I sell liquor, do I require a separate licence?

Yes, the Saskatchewan Liquor and Gaming Authority (SLGA) notifies the Ministry of Finance whenever a Liquor Licence is issued and we issue a separate licence under The Liquor Consumption Tax Act (the licence number starts with a 4). This licence authorizes the holder to purchase liquor from the SLGA for resale. Return forms are sent to you either monthly, quarterly or annually depending on the amount of Liquor Consumption Tax you will collect (the same filing requirements as for PST).

Do I have to collect PST on tobacco sales?

Yes, PST must be collected on the full selling price, excluding GST. If sold for a tax-inclusive price, the PST may be calculated by multiplying the selling price by 5/110.

Related Links

The Provincial Sales Tax is a 5% sales tax which applies to the purchase, importation, or rental of certain goods and services. Businesses that sell taxable goods or services in the Province are required to obtain a Provincial Sales Tax vendor's licence. 



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