How does the provincial sales tax (PST) apply to your particular business? For the purposes of illustration, let's assume that you operate a small business in Saskatchewan, selling stained glass ornaments and art objects that you've designed. In Saskatchewan, Provincial Sales Tax (PST) is charged at a rate of 5%.
(BC, Manitoba, and Quebec also have Provincial Sales Tax in addition to GST. See
- Does Your Business Need to Register for BC PST?
- How To Charge and Remit Retail Sales Tax in Manitoba
- and/or my Provincial Sales Tax library of articles for more information.
1) Do you have to charge Provincial Sales Tax (PST)?
Yes. PST must be charged on the sales of all tangible property, unless exempt. The Government of Saskatchewan defines "tangible property" as "anything that can be seen, weighed, measured, felt, or touched; that is, anything that we can perceive with our senses." It also includes computer programs, and electricity. So every time you sell one of your stained glass pieces, you'll charge provincial sales tax as well as GST.
2) How do you do invoice PST?
In Saskatchewan, the Provincial Sales Tax owing is calculated based on the selling price of the article before GST has been applied. So let's suppose that the price you're charging for one particular stained glass ornament is $24.95. The GST is 5%, which is $1.25 and the PST is 5% in Saskatchewan, which is also $1.25. You will list these charges separately on your sales invoice, along with the total of $27.45.
How to Invoice provides a sample invoice you can use as a template and explains in detail what has to be on your invoice.
(Note that while this is also how Provincial Sales Tax is applied in Manitoba, Quebec and Prince Edward Island are the exceptions to this rule; in these two provinces, PST is charged based on the total of the selling price plus GST.)
3) But what if you ship your products out of the province?
You are responsible for collecting the Provincial Sales Tax for sales within Saskatchewan. So if you ship a stained glass ornament to someone in another province (or in the U.S.), you don't charge them the Provincial Sales Tax. (Be sure, though, that you keep all your bills of lading and other shipping documents to prove that this was an out-of-province sale.)
4) What do you do with the Provincial Sales Tax you've collected?
You remit the Provincial Sales Tax you collect to the province. The first step is to register as a vendor. In Saskatchewan, this means that you fill out a PST Vendor Application Form. You can get this form online at the link provided or by mail or fax. You can also complete the form over the phone or get one in person at the Saskatchewan Ministry of Finance's Regina office. Registration as a provincial sales tax vendor is free.
Then, just as you do with the GST, it's a matter of keeping track of the Provincial Sales Tax you collect and filling out and filing an PST return form. The form comes with line-by-line instructions. In Saskatchewan, how often you have to file your PST returns (and pay what you owe) is determined by the amount of PST you charge your customers each month; the government will tell you how often you have to file when you register.
Note that unlike the GST, there is no Small Supplier classification for the Provincial Sales Tax. In other words, even if your sales are small, if you're selling taxable goods and/or services, you must obtain a Vendor's Permit and report your Provincial Sales Taxes.
5) What about the Provincial Sales Tax you've paid for business supplies?
In Saskatchewan, you have to pay PST on any equipment or supplies that you purchase for use in your business. In fact, if you buy equipment or supplies from a supplier outside of Saskatchewan, you have to self-assess PST when you bring the goods into Saskatchewan.
However, you can claim an exemption from PST for any taxable goods or taxable services that you purchase and intend to resell, such as your inventory. To do this in either Saskatchewan, you give your supplier your Provincial Sales Tax number.
For More Information on Provincial Sales Tax and the Goods and Services Taxprovides more detail on the ins and outs of applying PST in that province.