What is PST?

PST or Provincial Sales Tax is a sales tax levied by the provinces. It applies to the importation and purchase of certain services and goods. Saskatchewan, Quebec, Prince Edward Island, and Manitoba collect separate provincial taxes. Goods and services to which the tax applies vary depending on the province. Furthermore, provincial sales taxes are cascading taxes, and only the Quebec Sales Tax is value added. A cascading tax or cascade tax is a turnover tax that applies at all stages of the supply chain. No deductions are made for taxes paid at earlier stages.

In Saskatchewan, for example, the provincial sales tax applies to individuals and businesses that buy taxable services and goods in the province and to those who import taxable services and goods for use or consumption in Saskatchewan. The provincial sales tax does not apply to used automobiles, provided that tax has been paid. To qualify, the vehicle must be a light van (cargo van, passenger van, min-van), car, light truck, or sport utility vehicle. Excluded from the exemption are motor homes, trailers, heavy vehicles, snowmobiles, etc.

In British Columbia, the Harmonized Sales Tax replaced the provincial sales tax as of July 1, 2010. Prior to July 1, businesses were required to register as PST vendors if they sold taxable services or goods. Under the PST transitional rules, applicable PST exemptions continued to provide tax relief.

In Quebec, the 3 consumption taxes are: the Harmonized Sales Act, the Quebec Sales Tax, and the Goods and Services Tax. Registrants collect QST, HST, where applicable, and GST on taxable sales. Registrants that sell taxable services or goods are required to bill and collect QST and GST. QST and GST are payable on the date on which payments are due or on the date on which payments are made. Generally, GST applies to personal tangible and intangible property, personal property, and real property. QST equivalent terms are movable incorporeal and corporeal property, movable property, and immovable property. Examples of intangible property are shares, patents, licenses, and copyrights. Examples of tangible property include spare parts, cash registers, computers, desks, etc.

The supply of most services and goods in Quebec is subject to QST and GST. Transactions conducted in the province are subject to 8.5 percent QST and GST. The Quebec Sales Tax is calculated on the sales price. Certain services and goods are subject to QST and GST at the rate of 0 percent (they are zero-rated). A small number of services and goods are not subject to QST and GST meaning that they are tax-exempt. It is important to note that small suppliers are not required to register for the QST or the GST. Even if they make sales, they are not required to remit taxes.

Finally, some provinces do not collect separate provincial sales taxes, including Newfoundland and Labrador, New Brunswick, Yukon, Ontario, the Northwest Territories, and Nunavut. Provincial sales tax and Goods and Services Tax are collected in Manitoba while harmonized sales tax (HST) is collected in Nova Scotia.