May 6, 2020 Ministry of Finance Provincial Sales Tax (PST) Rural - PowerPoint PPT Presentation

May 6, 2020

Ministry of Finance Provincial Sales Tax (PST) Rural Municipal Administrators Association October 26, 2017

Tax Compliance Officers Colin Chicoine Tanya Chandra

Revenue Division Our Major Goals • Promote compliance with Saskatchewan's tax programs through quality service, taxpayer education and responsible, effective enforcement. • Ensure that taxpayers and businesses are treated consistently and fairly in their dealings with us.

Revenue Division Our Major Goals Cont’d • Ensure that our programs are administered efficiently; minimal administrative efforts for businesses to comply. • Ensure that our employees are skilled, knowledgeable and versatile and that open communication is encouraged.

PST Revenue $1,600,000,000 $1,400,000,000 $1,200,000,000 $1,000,000,000 $800,000,000 $600,000,000 $400,000,000 Revenue $200,000,000 $0

Provincial Sales Tax (PST) changes • Rate change: Increase from 5% to 6% - effective March 23 rd • Tax base is expanded:  PST on Construction Service Contracts – effective Apr 1 st  PST on Insurance Premiums - Effective August 1 st  PST on Restaurant Meals & Snack Foods (GST Rules) – Effective April 1 st  PST on Children’s Clothing - effective April 1 st  Remission/Exemption for PME removed – effective date April 1 st • Purchase or lease of Permanently Mounted Equipment (PME) now subject to PST. • Regulations exempting Enhanced Oil Recovery (EOR) projects remains.  Trade-in removed for Light Vehicles (new and taxable used) - effective April 1 st • $3000 exemption still in place

Registered Consumer Permit (RCP) to Licensed Vendor RCP accounts directly affected by the Base Change were converted • to Licensed Vendors (LV) and were notified by mail. A LV is required to collect and remit PST on their services but they • are allowed to purchase items for resale exempt of PST. A supplier can check the on-line Registry to ensure the LV account • is registered with the Ministry. http://www.skpstregistry.gov.sk.ca/ •

Filing Your Tax Return  Accounts were also converted to a monthly filing frequency.  Our office can be contacted by phone or email to change the filing frequency from monthly to quarterly on annual  Return forms sent automatically  Due 20th of month following return period  Must file a return  Penalty and interest if filed late

Information Bulletin PST-41 • Information for Cities, Towns and Municipalities  PST owing on purchases of new and used vehicles, tools, equipmentand supplies.  PST also owing on purchases of taxable services such as real property services, accounting and commercial cleaning.  If goods are purchased from an unlicensed supplier such as out of province, PST must be self-assessed on the laid down cost on the return.

Laid Down Cost Includes: • Currency exchange • Transportation charges/freight • Customs and excise duties • Importation charges … but not the GST • Reported as consumption tax (line 3) on PST return

PST-41 – Exemptions for RMS  Sand and gravel  Fungicides/herbicides/insecticides  Tree planters and repair parts  Water treatment chemicals and filter membranes (for drinking water)  Weed sprayers and repair parts  Fire Trucks and attached equipment

PST-41 Exemptions for RMs • Cities, towns and municipalities are exempt from paying tax on electricity used for the following purposes: • heating of buildings where the heating is produced solely by electricity • public curling rinks, skating rinks, swimming pools (that are not operated for profit), fire halls, sewage disposal and water pumping • street lighting, lighting of park pathways, tunnels and underpasses

PST-41 Taxable Items for RMs  Furniture, machinery, equipment  Building/landscaping supplies (Including grass seed, trees, flowers, decorative rock, etc.).  Garbage containers  Road salt, sandbags, rodenticides  Sewage equipment and treatment chemicals  Tractors, water meters, water treatment equipment

PST-41 Taxable Items for RMs Real Property (RP) Service Contracts Contractors converted to Licenced Vendors •  Required to collect PST on Retail Sale of taxable RP service contracts and services to TPP • Value includes materials, labour, and other charges  As a vendor, contractors will now purchase materials for resale, exempt of tax • Can claim Inventory credits – apply against tax reported, no refunds • Still accountable for tax on goods for own use or consumption (tools, vehicles, etc.) Transition Rules Developed • Bonding (or cash deposit) now required for Resident & Non-Resident • Contractors performing a service to RP at 6%, • Section 29 and Clearance Process Remains

Transition rules Binding agreements, terms, and contracts that extend past April 1, • 2017 that relied on the old rules (PST on cost of materials) for pricing and costs will be transitioned to avoid undue hardship for parties (unable to recover or pass the added cost to the customer). Materials purchased on or after March 23 rd are subject to PST at the • new rate 6%. A registry of grandfathered contracts is being developed to help • certify and track these projects.

Taxable Sales for RMs  Grading/blading roads and filling potholes  Maps, signs and culverts  Gravel  Application of dust suppressant  Fungicides/insecticides/rodenticides  Building repairs and landscaping projects (including tree removal and stump grinding)  Used goods are taxable, but an exemption may apply:  personal use - $300 exemption per item  business use – no exemption  Information Bulletin PST-58

Exempt Sales for RMs  Lawn care maintenance such as mowing, aeration, pulling weeds, tree/shrub pruning, spraying weed control/fertilizer, and site clean-up  Garbage removal  Herbicides and weed killers  Snow removal  Rentals of real property  Permits  Water and sewer charges

On-line Services • Website (www.saskatchewan.ca)  Information Bulletins, PST Rulings, Notices • Saskatchewan Electronic Tax Service (SETS) • Taxpayer Service Commitments and Standards Code: located at (http://www.saskatchewan.ca/ServiceCode) • PST On-Line Registry (http://www.skpstregistry.gov.sk.ca/ )

Email Notification • Must be registered for SETS. • Offered to clients that do not want to receive mailed tax returns. • An email reminds the client of the due date for the return and provides a link to SETS.

On-line PST Registry • Consumers and businesses can verify online, anytime that the businesses they deal with are licensed or registered with the Government for PST purposes. • The new registry will be of most use to contractors, who are responsible for ensuring that all of their subcontractors are registered for PST purposes .

On-line PST Registry • Individuals who would like to confirm the businesses that they are making purchases from are registered for PST purposes. • Wholesalers will also be able to verify that the retailers they sell to are licensed and therefore allowed to purchase goods PST free.

Other Services • Toll Free Inquiry Line 1-800-667-6102 • Tax Inquiries: sasktaxinfo@gov.sk.ca • Requests for written rulings: sasktaxinfo@gov.sk.ca • Requests for presentations/Outreach Visit: sasktaxinfo@gov.sk.ca • Subscribe to What’s New http://www.saskatchewan.ca/business/taxes-licensing-and-reporting/provincial- taxes-policies-and-bulletins/tax-information-updates

For Further Information  Write: Ministry of Finance 2350 Albert Street Regina, Saskatchewan S4P 4A6  Telephone: Toll Free: 1-800-667-6102 Regina Local: 306-787-6645  E-mail: sasktaxinfo@gov.sk.ca  Fax: 306-787-9644  Internet: http://www.saskatchewan.ca

Questions?