PST on Vehicles

Res #: 16-04A
Number: 16
Year: 2004
Midterm: No
Expired: Yes
Responses Received: No
Departments: Saskatchewan Finance

Resolution No. 16-04A

WHEREAS, PST is charged on sales of vehicles over $3,000 but only charged on the dollar difference when a vehicle is traded in to a dealership; and

WHEREAS, if you don't trade your vehicle, but prefer to sell it privately, the PST is still charged on the amount over $3,000 before the vehicle can be licensed and goes directly to provincial coffers and is not recoverable in any amount by the private seller; and

WHEREAS, the PST could be charged and collected by the provincial government numerous times on the same vehicle;

THEREFORE BE IT RESOLVED, that SARM lobby the provincial government to rescind this tax law and return to a tax system that would allow for recoverability of the PST by private concerns and ultimately the payment of the PST only once in the life of a vehicle.

Response from Honourable Harry Van Mulligen, Minister of Finance:

It is fundamental to a sales taxation system that applies tax to used goods that all goods be subject to tax. Providing special exemptions for one category of goods invariably results in pressure for similar exemptions for other classes of goods. Furthermore, exempting the subsequent sales of used vehicles from the PST would result in a significant loss of revenue that would likely have to be compensated for elsewhere in the provincial tax system.

However, in recognition of the fact that a vehicle often changes hands several times during its lifetime, the Government allows a $3,000 deduction from the selling price prior to the application of PST when vehicles are sold between individuals. As well, the value of a trade-in may be deducted from the value of a vehicle purchased from a dealer or business before the PST is applied. These measures help to preserve the consistency of the tax system while mitigating the impact of the PST on subsequent vehicle transactions. Saskatchewan is the only Canadian jurisdiction that allows a $3,000 deduction of private vehicles sales for sales tax purposes.