Provincial Budget 2000 - Provincial Sales Tax ("PST")

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To: Deans, Department Heads, Directors and Administrative Assistants

From:  Laura Kennedy, Associate Vice-President (Financial Services)

Date:  March 30, 2000

Re:  Provincial Budget 2000 - Provincial Sales Tax ("PST")

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Yesterday, the Saskatchewan government announced changes to the Education and Health Tax Act that will expand the amount of goods and services now subject to PST. Units on campus that provide such goods and services to external parties must now charge the 6% PST on all sales to external clients. Units on campus that acquire such goods and services will need to be aware and plan for this cost within budget plans.

PLEASE ENSURE THAT ALL PERSONNEL INVOLVED WITH THE SALE AND ACQUISITION OF GOODS AND SERVICES ARE MADE AWARE OF THESE CHANGES.

Below is a summary of the additional goods and services that will be subject to PST. There are certain exceptions to the listing below. For this reason, units that provide or acquire such goods and services are strongly advised to also refer to the attached information bulletin. The web site for this general bulletin is http://www.gov.sk.ca/finance/revenue/pst/pstindex.htm.

Effective March 30, 2000 the following goods and services will be subject to PST:

• Repair and other similar services
• Computer services
• Used goods
• Off-reserve purchases by status Indians
• Non-prescription drugs and medicine
• Equipment maintenance contracts
• Bedding plants, sod, seeds – flower bulbs, trees and shrubs
• Pet food, veterinary fees and veterinary drugs and medicines
• Disinfectants; germicidal
• Dry cleaning and laundry service
• Telephone answering services
• Real estate fees
• Credit reporting and collection services
• Security and investigation services

Transition Rules:

The following transition rules apply to goods and services that became taxable on March 30, 2000:

• Items delivered before March 30, 2000 are exempt, even if paid for after March 30, 2000.
• Items paid for (fully or partially, including down payments) before March 30, 2000 are exempt, even if delivered after March 30, 2000.
• Items ordered before March 30, 2000, but delivered and paid for on or after March 30, 2000 are subject to tax.
• Services completed before March 30, 2000 are exempt, even if paid for after March 30,2000.
• Services performed on or after March 30, 2000 are subject to tax.
• Written contracts entered into before March 30, 2000 for services to be provided on or after March 30, 2000 will be exempt, provided the contract is for a fixed amount and a specified period of time.

 Additional Changes:

In addition to the above changes, effective July 1, 2000, the following goods and services will be subject to PST: (contracts signed before March 30, 2000 will be treated as outlined above under the section on transition rules)

• Advertising services  
• Professional services – legal, accounting, architectural, consulting, and engineering
• Commercial building cleaning services; and
• Employment placement services

A communication will be sent out in early June to clarify the definition of advertising and consulting services.

Information Sources:

For your information, the web site that provides all of the Saskatchewan Government's revised interpretation bulletins is http://www.gov.sk.ca/finance/budget/budget00/tax.htm.

After reading the relevant information bulletins, if you still have specific questions about the changes, please contact Tracey McHardy, Manager, Taxation at 966-2461 or via email tracey.mchardy@usask.ca.

Yours truly,

Laura Kennedy, C.A.

Associate Vice-President (Financial Services)