The Ultimate Guide To PST In Saskatchewan

Provincial Sales Tax (PST) is a sales tax that applies to all taxable goods and services in Saskatchewan. PST applies to both sales that occur within Saskatchewan and goods and services imported and consumed or used in Saskatchewan. This sales tax applies to both new and used goods; it even applies to rental transactions. Although this seemingly comprehensive application can make PST in Saskatchewan look straightforward, the tax structure can be complicated because Saskatchewan tax law allows for several exemptions and exceptions. A tax lawyer may be able to help taxpayers navigate the nuances of their province’s sales tax. Consider contacting Jeremy Scott Law at (902) 403-7201 for more information on sales and other tax requirements in Saskatchewan.

What Are GST and PST in Saskatchewan?

Canada imposes a Goods and Services Tax (GST) at the federal level. In addition, some territories or provinces combine their local taxes with the GST to create a Harmonized Sales Tax (HST). However, several provinces, including Saskatchewan, maintain a separate local sales tax, rather than combining with the GST. This tax is simply referred to as the Provincial Sales Tax or PST. Other provinces that also have their own PST include British Columbia, Manitoba, and Quebec.

As a rule, PST in Saskatchewan applies to all goods and services consumed in Saskatchewan, even if they originated elsewhere. There are some important exceptions, however.

What Items Are Exempt from PST in Saskatchewan?

Not every good or service is subject to Saskatchewan’s PST. Many goods and services that fall under the “zero-rated” or “exempt” category for GST at the federal level will also fall under an exception to PST in Saskatchewan. However, the good or service must fall under a specific exemption to avoid taxes, and Saskatchewan has far fewer exemptions to their PST compared to other provinces. Non-taxable items (for Saskatchewan PST purposes) will generally include “basic needs” items, such as:

• Basic groceries
• Reading materials
• Agricultural equipment
• Prescription drugs and mediations

Saskatchewan also recently announced tax exemptions for some recreational and leisurely activities. For example, gym and fitness club memberships are exempt. Many league or club memberships for participants under the age of 18 are also exempt. In addition, non-profit organizations and charity groups that provide recreational programs for children are also not subject to PST.

Businesses and PST in Saskatchewan

Companies are generally required to collect PST from their customers and then remit those collections to the taxing authorities. Each company that must collect PST must also register for Saskatchewan PST. If a company does not properly charge and remit the PST, individual taxpayers are responsible for self-reporting and paying the tax. Only very small, (Ie typically home-based businesses) are likely to be completely exempt from PST collection requirements in Saskatchewan. These small businesses must meet each of the following requirements to be PST exempt:

• They have sales that total less than $10,000 (note that this is not revenue; it is gross sales)
• They only make and sell goods from their home or provide services from their residence
• PST is paid or sell-assess on equipment and supplies used for the production of the goods and services provided

Selling at farmers’ markets or in online marketplaces will disqualify a business from exemption from the PST in Saskatchewan. Even renting goods and services can trigger the PST. Owing to the strictness of the qualifications for exemption, most Saskatchewan businesses can expect to be responsible for collecting and remitting PST.

Tax Offsets for PST

In some areas, taxpayers can claim back GST or HST to offset it against collected taxes. That is, taxpayers can pay less in GST or HST because they already paid GST or HST when they purchased their inventory or supplies. However, there is no similar option to offset PST in Saskatchewan. Some other options for tax breaks do exist for businesses in Saskatchewan, however. Consider scheduling a consultation with Jeremy Scott Law to review your business situation and determine whether any of Saskatchewan’s provincial tax incentives may apply.

PST Return Filings

Every business that must pay PST must also file a PST return at least annually. Depending on the scale of the business, however, many companies will need to file more frequently. If the company’s reported tax is between $4,800 and $12,000 per year, then they need to file quarterly. If their reported tax is higher than $12,000 per year, then returns (and payments) are required monthly. Companies that make less than $4,800 and do not qualify for PST exemption under the category for small home businesses must file annually.

In general, monthly returns are due by the 20^th of each month following the end of the reporting period. However, returns paid and filed electronically with the Saskatchewan Electronic Tax Service or SETs are due by the last day of the month. According to the Government of Saskatchewan, even if there is no tax to report for a specific period, businesses may still be required to file a “NIL” return.

What Is the Penalty for Not Paying PST in Saskatchewan?

Companies that do not pay the required PST may face steep penalties following an audit. The reason that the PST was not paid can affect the amount of the penalty. For instance, if a company does not collect PST as it should have, it will face a penalty of 10% of the amount assessed during the audit. If the company assessed the tax but willfully did not pay it, the penalty can be 100% of the amount audited. None of these penalties have a maximum amount of assessment.

In addition to direct penalties, companies may also have to pay interest on the amount of tax that was owed but not remitted, beginning from the original date on which the tax remittance was due. The interest rate is based on the prime lending rate as set out by the Government of Government of Saskatchewan’s General Revenue Fund, plus 3%. This interest rate adjusts every six months to account for changes in the market.

Get Help with PST Requirements and Returns in Saskatchewan

Both individuals and companies may need to collect PST in Saskatchewan. Keeping up with these obligations and fulfilling them in a timely fashion can help taxpayers avoid penalty and interest assessments. If you have questions about your obligations or filing requirements, consider contacting the experienced tax law team at Jeremy Scott Law by calling (902) 403-7201.