Provincial Sales Tax (PST)
- The PST rate increased from 5% to 6%, effective March 23, 2017. This measure will increase revenue in 2017-18 by an estimated $242.1M.
- Elimination Of Commission Allowance On Tax Collections Effective April 1, 2017, the commission allowance for the collection and remittance of Provincial Sales Tax, Liquor Consumption Tax and Tobacco Tax is eliminated.
- The Budget maintains many of the current PST exemptions for basic necessities, including basic groceries, heating fuels, residential electricity, prescription drugs and reading materials.
Expansions to the PST base include:
- Children’s clothing will become taxable effective April 1, 2017, matching the current federal Goods and Services Tax (GST) treatment. This measure will increase 2017-18 PST revenue by an estimated $15.6M.
- Restaurant meals and snack foods will become taxable as of April 1, 2017, adding an estimated $94.5M to PST revenue.
- Value of a trade-in allowance will no longer be deductible in determining the PST on the purchase of vehicles that are new or have not been previously taxed in Saskatchewan. This measure takes effect as of April 1, 2017 and is expected to increase PST revenue by $17.8M.
- The Budget reforms the taxation of contracts for the repair, renovation or improvement of real property. New contracts entered into on or after April 1, 2017 will be subject to PST on the total contract price to the purchaser. However, contractors will now be eligible to acquire tax-free building materials for use in fulfilling a contract. This measure impacts residents and businesses and is expected to increase 2017-18 PST revenue by $344.6M.
- The PST base is expanded to insurance premiums. The Government of Saskatchewan has extended the effective date for the application of PST to insurance premiums from July 1, 2017 to August 1, 2017. This measure impacts residents and businesses and is expected to increase PST revenue by $157.9M in 2017-18.
- The exemption for permanently mounted equipment in the oil and gas sector, resulting in $16.7M in incremental PST revenue in 2017-18.
Other Tax Expenditure Changes:
In addition to the elimination of these PST exemptions, the Budget also makes changes to tax expenditures related to several other taxes.
Fuel tax exemption for bulk purchases of gasoline is eliminated and for bulk purchases of diesel is reduced to 80% of the purchase, effective April 1, 2017. This measure impacts farmers and other primary producers and increases Fuel Tax revenue by $40.2M.
- Employee’s Tools Tax Credit is eliminated for the 2017 taxation year ($1M incremental revenue in 2018-19) and the Labour-sponsored Venture Capital Tax Credit rate will be reduced from 20% to 15% for the 2018 taxation year ($4M in 2019-20).
Have questions? Call the Ministry of Finance at 1-800-667-6102 or 306-787-6645 or email [email protected].
Tax bulletins, forms and information are available at: http://www.finance.gov.sk.ca/taxes
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