rtg: 101 may 1989 (revised october 2002) rental of golf ... · this cost is determined to be the...

Provincial Treasury Taxation and Property Records

PO Box 880 Charlottetown, PE Canada C1A 7M2 Tel: (902) 368-4070

Fax: (902) 368-6164

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RTG: 101 May 1989 (Revised October 2002)

RENTAL OF GOLF EQUIPMENT Golf equipment and supplies are taxable goods pursuant to the Prince Edward Island Revenue Tax Act and are therefore subject to the 10% provincial revenue tax (PST) on the GST included selling price. The rental and/or lease of golf equipment and supplies is also subject to revenue tax (PST) on the GST included rental fee. The tax applies to all equipment rentals or leases including carts, (both powered and manual), clubs, balls, etcetera. The rental fees charged for the use of balls on a golf club’s driving range, or a private driving range are also taxable regardless of how the fee is charged (annually or an a per occasion basis.) Annual fees charged for driving range use are not membership fees but rather are rental fees for the consumption or use of taxable goods and therefore revenue tax (PST) must be collected on these fees. This guide is provided for general information purposes. Should there be any conflict between the information contained in this guide and the legislation, the legislation shall prevail. Any questions concerning this guide should be addressed to: Taxation and Property Records Division P.O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca

http://www.taxandland.pe.ca/


PO Box 1330 Charlottetown, PE Canada C1A 7N1 Tel: (902) 368-4171

Fax: (902) 368-6164

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RTG: 102 May 1989 (Revised February 1991, July 2006, July 2007, January 2008)

ASPHALTIC CONCRETE & READY MIX CEMENT - MANUFACTURING The basis for determining the tax application for "Asphaltic Concrete and Ready Mix Cement" manufacturing remains unchanged. Asphaltic Concrete: Effective January 1, 1991 the "Current Deemed Price" for private supply and install contracts is $23.00. The Prince Edward Island Government contract price remains $11.00. Ready Mix Cement: Provincial Sales Tax is levied on 100% of the retail selling price as of January 1, 1990.

ASPHALTIC CONCRETE A: Supply & Install - Private Contract Manufacturers will be required to pay tax on their manufactured cost of asphaltic concrete for supply & install contracts. This cost is determined to be the deemed price per metric ton which is amended from time to time. The Goods and Services Tax (GST) must be added before the application of the provincial revenue tax (PST) - e.g. Current Deemed Price $23.00 G. S. T. at 5% 1.15 Deemed Retail Price $24.15 Revenue tax (PST) at 10% 2.42 $26.57

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B: Supply & Install - P.E.I. Government Contracts In cases where liquid asphalt is paid for by the P.E.I. Government, the deemed manufactured cost is determined to be $11.00 per metric ton. This cost is amended from time to time. Again the Goods and Services Tax (GST) must be added before the application of the revenue tax (PST) - e.g. Current Deemed Price $11.00 G. S. T. at 5% .55 Deemed Retail Price $11.55 Revenue tax (PST) at 10% 1.16 $12.71 These are considered Real Property Contracts, and as such:

(a) tax should be reported under the "Tax On Purchases" section of your monthly return form.

(b) no tax should show on your customer’s invoice. C: Supply Only - Private Sales Where asphaltic concrete is sold at a retail sale, manufacturers must register as vendors pursuant to the Revenue Tax Act and collect tax on their selling price as they determine from time to time. Contractors, therefore, who undertake paving contracts and purchase mixed asphaltic concrete from manufacturers, are liable for tax based on the retail selling price charged by the manufacturer. These are considered retail sales, and as such: (a) tax should be reported under the "Tax On Sales" section of your monthly return form. (b) tax should show on your customer’s invoice. D: Supply Only - Government and Municipalities Both the P.E.I. Government and Municipalities are exempt from tax on their supply only purchases of asphaltic concrete. Tack Coat - Any ingredient used for road preparation would be taxable to the manufacturer, contractor, etc.

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READY-MIX CONCRETE Ready-mix concrete manufacturers must register as vendors pursuant to the Revenue Tax Act and collect tax on the deemed retail selling price per cubic yard. The deemed retail selling price is the normal retail price as determined by the vendor from time to time plus the Goods and Services Tax (GST) less the delivery or transportation charge. EXAMPLE - (1) Calculation of revenue tax (PST) Manufacturer’s normal retail price $94.45 Plus: Goods and Services Tax at 5% 4.72 99.17 Less: delivery charge 14.39 Deemed selling price $84.78 Revenue tax (PST) at 10% 8.48 (2) Manufacturers Invoice Normal retail price $94.45 Goods and Services Tax at 5% 4.72 Revenue tax (PST) at 10% 8.48 TOTAL 107.65 B: Government and Municipalities Both the P.E.I. Government and Municipalities are exempt from tax on their purchases of Ready-Mix Concrete. Further Information

For copies of the Revenue Tax Act, Revenue Administration Act and Regulations and any inquiries regarding this Revenue Tax Guide, please contact:

Taxation and Property Records Division Department of Provincial Treasury P. O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca

This guide is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this guide and the statutes, the statutes shall prevail.




Fax: (902) 368-6164

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RTG: 103 May 1989

REFRIGERATION EQUIPMENT PURCHASED BY FARMERS This Revenue Tax Guide is prepared to advise that refrigeration equipment is exempt from revenue tax (PST) when purchased by a full time farmer for the purpose of maintaining proper storage conditions for products produced. For purposes of this exemption, the definition of refrigeration equipment includes such items as compressors, condensers, evaporator coils, etc. It does not include electrical wiring and/or controls. These items remain taxable. This circular is provided as a general guide and should not be considered a substitute for the legislation. Should there be any conflict between the information contained in this guide and the statutes, the statutes shall prevail. If any further assistance is needed regarding proper tax application, please contact: Taxation and Property Records Division P.O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca




Fax: (902) 368-6164

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RTG: 104 July 1993 (Revised November 1997) (Revised October 2007)

CLOTHING AND FOOTWEAR This guide outlines the revenue tax (PST) exemptions which apply to clothing, footwear, safety clothing and safety footwear. It also provides examples of taxable items. CLOTHING: Articles of clothing, including fabrics and accessories, as defined by the regulations, are exempt from PST. The clothing exemption applies to those items designed to be worn on the body, including such items as belts, belt buckles, hats and scarves, but does not apply to protective items (see list of taxable goods below). Fabrics and Accessories Fabrics, felt and hat bindings, pellon, backing and lining material, wool, yarn, clothing patterns, zippers, buttons, bindings, thread, dress fasteners, hooks and eyes, and such supplies purchased for use in making or repairing clothing are exempt from PST. Labour charges to make or repair clothing are also PST exempt. Fabric, wool and all sewing supplies used to make non-clothing items, such as drapes, rugs, slip covers, etc. are NOT exempt and are subject to PST. Labour charges to make or repair non-clothing items are taxable. Equipment and supplies used to make or repair clothing or non-clothing items, such as scissors, needles, and sewing and knitting machines, are NOT exempt, and are subject to PST.

Taxable goods The following protective items are NOT included in the definition of tax-exempt clothing and are subject to PST: - athletic supporters - hockey gloves - baseball gloves - hockey pants - batting gloves - knee pads - diving suits - latex gloves - elbow pads - shin pads - goalie pads - shoulder pads - golf gloves - swim goggles - helmets and masks - other protective items of a similar nature

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In addition, the following items are also NOT exempt and are subject to PST: -costumes -umbrellas -hair accessories -watches -jewellery - similar items -purses FOOTWEAR: Footwear, as defined by the regulations, is exempt from PST. The exemption also applies to shoe laces, insoles and other similar shoe accessories. Repair charges for exempt footwear are also PST exempt. However shoe polish, cleaners, brushes, etc. are subject to PST. Taxable goods The following sports items are NOT included in the definition of tax-exempt footwear and are subject to PST: - baseball cleats - roller skates - bowling shoes - skates - chest waders - ski boots - curling shoes - soccer cleats - football cleats - track (running) cleats - golf shoes - footwear of a similar nature

- roller blades - repair charges for taxable footwear

PLEASE NOTE: These are not exhaustive lists and any questions regarding the taxability of clothing and/or footwear should be directed to Taxation and Property Records. SAFETY CLOTHING AND SAFETY FOOTWEAR: Safety clothing and safety footwear, as defined by regulations, are exempt from PST. Safety clothing and safety footwear is defined as safety boots, hard hats, goggles, face-shields, protective clothing and items of a similar nature that are required in the workplace for safety protection, but does not include sportswear. FURTHER INFORMATION: For copies of the Revenue Tax Act and Regulations and any inquires regarding this Revenue Tax Guide, please contact:

Taxation and Property Records P.O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca





Fax: (902) 368-6164

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RTG: 106 (Revised December 2007) May 1991

SPIRITS, WINE AND BEER All spirits, wine and beer sold by the glass or bottle in establishments licensed under the P.E.I. Liquor Control Act and Regulations are taxable under the Revenue Tax Act. Operators of clubs, lounges, legions, recreation centres, etc., who are licensed under the Liquor Control Act, must register as vendors under the Revenue Tax Act and collect revenue tax (PST) on all sales of spirits, wine and beer. The P.E.I. Liquor Control Commission will not collect PST on spirits, wine and beer when purchased for resale purposes. Furthermore, pursuant to Section 13 (2) of the Revenue Tax Act, the Commission will not sell such beverages, for resale, to any person who is not registered as a vendor with this province. PST EXEMPT MEALS The Revenue Tax Act provides for a PST exemption on prepared food products supplied or sold on an occasional basis by a religious, charitable or benevolent organization where the labour is volunteer and without remuneration. While soft drinks are included in the definition of prepared food products, alcoholic beverages are not. Therefore, if a single price is charged for such a PST exempt meal including spirits, wine or beer, PST must be collected on the value of the included spirits, wine or beer. WINE AND BEER-MAKING KITS Wine and beer-making kits that contain only ingredients such as beer and wine concentrates or malt extracts are exempt from PST. Wine and beer-making supplies and equipment such as corks, labels, filters, chemicals, fillers, corkers, bubblers, and bottles are subject to PST. Kits that contain both ingredients and supplies/equipment are subject to PST on the selling price of the package if the value of the taxable items in the package makes up 50% or more of the value of the package. FURTHER INFORMATION For copies of the Revenue Tax Act and Regulations and any inquiries regarding this Revenue Tax Guide, please contact: Taxation and Property Records P.O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca This guide is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this guide and the statutes, the statutes shall prevail.




Fax: (902) 368-6164

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RTG: 108 September 1989

EXTENDED WARRANTY INSURANCE This circular deals with the proper application of revenue tax (PST) to warranty plans for those automobile dealers who offer extended warranty plans to purchasers of new or used automobiles, For purposes of the Revenue Tax Act there are two main types of coverage - factory coverage and extended coverage. FACTORY COVERAGE When a new auto is purchased it comes with a “Factory Warranty” or what is commonly called a "New Car Warranty". Because the premium is incorporated into the price of the new car, the tax on the premium gets paid at the point of sale. This "Factory Warranty" or "New Car Warranty" usually offers two option packages and each is administered differently. (1) Twelve Month or 20,000 km This is a full warranty in which repairs result in no charge to the customer, therefore, no revenue tax (PST) is applicable. Included under this warranty would be large repairs such as motor, transmission, rear end as well as smaller things such as muffler, shocks, electrical system, etc. Again there is no charge made to the customer during the first year or 20,000 km and, therefore, no revenue tax (PST) is applicable. However, in the case of a new car purchase there is what is called a “Drive Train Warranty” and this is treated differently. (2) Drive Train Warranty This warranty continues after the twelve months or 20,000 km are over (for example, some run for seven years or 115,000 km). Repairs covered under this warranty are motor, transmission, rear end, etc. Smaller repairs such as electrical, muffler, etc., are not included in the Drive Train Warranty. This is where the deductible comes into play. The normal deductible is $100 per repair visit is taxable to the customer. Further, the customer may purchase a Gold Plan which, among other things, reduces this deductible to $25 and covers some of the areas that the “Drive Train Warranty” does not cover. Thus when a “Drive Train Warranty” becomes effective, there is no charge to the customer for the repair other than the deductible, therefore, like the twelve month warranty above, no revenue tax (PST) is due except on the portion charged to the customer.

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For example, assume the repair is $600, the factory warranty or Drive Train Warranty pays $500, the only taxable amount is the $100 deductible. With a Gold Plan the customer may only pay $25 and the Gold Plan People pay $75. In this case the customer would still be fully taxable on the $100, regardless of who pays. EXTENDED COVERAGE & INSURANCE ($250. DEDUCTIBLE) Under the "Extended Coverage" the premium is paid to a firm other than the factory and the premium is not taxable. However, all repairs would be taxable. The full charge is taxable and it is between the customer and the car dealer to recover the customer's outlay for the repair. In some cases, the car dealer will not charge the customer, rather the dealer recovers the repair bill internally, but in all cases revenue tax (PST) is being charged on the repair bill (deductible comes into play after the tax is charged). This guide is prepared for information purposes only. Should there be any conflict between the information contained in this guide and the statutes, the statutes shall prevail. If further information is required, please contact: Taxation and Property Records Division P.O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca




Fax: (902) 368-6164

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RTG: 109 May 1990 (Revised September 2005, June 2008)

TAX EXEMPTIONS FOR FARMERS The following goods may be purchased by a farmer who is in possession of a valid Revenue Tax Exemption Permit, exempt of revenue tax (PST) when purchased for use in farming and for no other commercial purpose.

-A- Alarm systems that monitor temperature and humidity levels, if used to prevent death or damage to livestock or crops Anti-backflow devices Apiary equipment - beekeeping supplies - bee hives - pollen traps - smokers - swarming poles and boxes - wax extractors Artificial insemination equipment Auxiliary power generators Axes

-B- Bale elevators and loaders Bale shredders, grapples and spears Barn and stable cleaning equipment - automatic barn cleaners - brooms - forks - pressure washers - shovels - wheelbarrows Bees Blacksmith tools Brush cutters Buckets and pails Bulk boxes specifically designed to haul farm products, fertilizer or pesticides and attached to farm wagons or trailers not registered for highway use or to a motor vehicle that is registered as a “farm truck” under the Highway Traffic Act Farm Truck Registration Regulations

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-C- Calcium chloride for farm tractor tires Carcass incinerators Chain saws and buck saws Chains for farm tractor tires Chemical application equipment, either self-propelled or for attachment to farm tractors - field sprayers or dusters - water pumps for sprayer tanks Containers used to process, ship or deliver farm products, but not including containers mounted on trucks or trailers Crop handling equipment - bin loaders - conveyors - escalators - grading equipment for farm products - grain augers - grain blowers - grain cleaners - grain moisture meters - grain treaters - portable grain elevators - potato bin loaders Crop harvesting equipment, either self propelled or for attachment to farm tractors - combines - potato harvesters - swath turners Crop nutrients - fertilizer - lime - plant growth regulants Crop planting equipment, either self propelled or for attachment to farm tractors - planters and seeders Crop protectants - crop protectors - fungicide - herbicide - insecticide - pesticides - rodent control devices and chemicals

-D- Dump boxes, attached to farm wagons or trailers not registered for highway use or to a motor vehicle that is registered as a “farm truck” under the Highway Traffic Act Farm Truck Registration Regulations

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-E- Egg handling and grading equipment - baskets, cartons and trays - brushes - candlers - gathering equipment - graders Electric motors for use on farm machinery Electronic controls and GPS systems for farm machinery Equipment used to skin, flesh and preserve animal pelts - fleshing machines - pelting boards, knives and sleeves - skinning machines Equipment used to ventilate, dry, humidify, refrigerate or aerate farm product - aeration systems - hay drying fans - humidifiers used in product storage - refrigeration systems for feed and produce - ventilation systems

-F- Farm trailers not required to be registered under the Highway Traffic Act Farm wagons not required to be registered under the Highway Traffic Act Fencing equipment - all types of fencing - poles, posts and stakes - posthole augers Fertilizer and lime application equipment, for attachment to farm tractors - applicators and spreaders - fertilizer auger - lime bulk boxes - liquid fertilizer diluter, injectors and valves - tanks Flat beds attached to farm wagons or trailers not required to be registered for highway use or to a motor vehicle that is registered as a “farm truck” under the Highway Traffic Act Farm Truck Registration Regulations Fork lifts, either self propelled or for attachment to farm tractors Forks Fox tongs Front end loaders, either self propelled or for attachment to farm tractors - industrial front end loaders

-G- GPS systems for farm machinery Gearbox pans Grease Greenhouse glass cleaning equipment

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Greenhouse material handling equipment

- carriers - material handling - pots and flats - soil mining machinery Greenhouse thermostats and humidistats - humidistats - thermostats and temperature controls Greenhouse watering systems - feed water treatment equipment - watering equipment and programmers

-H- Hay and forage crop harvesting equipment, either self propelled or for attachment to farm tractors - bale wrappers - baler twine and ties - balers - forage harvesters - mowers and mower conditioners - rakes and tedders - silage cutters Heaters (salamanders) Heating systems for incubators or farrowing crates Hoes Horse harness and hardware Horseshoes Hydrometers

-I-

Incubation equipment and supplies - equipment and light bulbs to promote or inhibit growth - heat lamps and bulbs - incubators

-L-

Labels for packaging product for sale Labour to repair any exempt machinery and equipment Ladders designed for fruit picking Land drainage tile Land irrigation systems - applicators - pipes, tubing and fittings - pumps - submergible pumps - sprinklers - water pumps

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Land tillage and cultivating equipment, for attachment to farm tractors - brush cutters - chisel plows - cultivators - harrows - moldboard plow - rototillers - weeders Light bulbs - HID lamps HPS or LPS (high and low pressure sodium) MH (metal halide or multi vapor) MV (mercury vapor) - infrared heat lamps - plant grow lamps - tough skin bulbs or Teflon coated bulbs Lightning rods Livestock - cattle - horses - poultry - sheep - swine

Livestock bedding materials - sand - sawdust - shredded paper - straw - wood chips Livestock feed and feed additives - grain - hay - hay salt - molasses - salt licks Livestock feeding equipment, systems and controls - automatic systems and controls - bins and carts - bottles and pails for feeding and drenching - cookers, grinders, mixers and grain rollers - hammer mills - scoops Livestock grooming and cleaning equipment - foot rot shears - hoof trimming knives - hoof trimming stalls - shampoos for livestock - sheep shears and clippers - vacuum cleaners for livestock

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Livestock handling equipment - bull rings, staff and snaps - cattle squeezes - cow stanchions and ties - dehorners, both paste and wire - head gates - hobbles - kick restrainers - livestock cages - portable corrals - poultry debeakers - prod poles - stock boxes - tooth nippers - wire mesh for livestock cages Livestock health maintenance and monitoring equipment - calf pullers - castrators, holders and knives - gestation calendars - lamb savers - mastitis detectors - nipples - obstetrical saw wire - pregnancy testers - ROP test bottles - sow collars, stalls and ties - udder infusion tubes Livestock identification equipment - bar coding equipment - ear notchers - marking pencils and guns - micro chips - tags Livestock protective equipment - animal blankets - animal boots - animal foot baths - cattle back rubbers, oilers and oiler concentrates - protectors - rumen magnets Livestock watering equipment - electric deicers for stock tank - nozzles - portable immersible heaters and warmers for water troughs - troughs - watering bowls

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-M- Manure handling equipment Manure spreaders Milking and milk storage equipment - coolers and storage tanks - liners, strainers and filters - milking machines - milking parlor equipment - pipelines and transfer systems - rubber mats for parlors - stools - teat dip, dilators, instruments, protectors and spray - udder supports, wash, disposable udder wipes Mulch

-O- Oil

-P-

Packaging materials

- ink - plastic wrap - stampers

Parts (repair/replacement) for any exempt equipment and machinery - batteries - complete parts - fan belts - filters - hoses - hydraulic hose and fittings - machine bolts, nuts and washers - paint applied to goods exempted to farmers - spark plugs - tires Plants Potting machine Prefabricated or portable storage bins - grain bins Protective clothing and devices used in the distribution of controlled chemicals Pruning clippers and shears

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-R-

Rakes Removable pens, crates, stalls and flooring for livestock - farrowing crates - plastic flooring for pens and stalls - rubber cow mats Repair labour to service exempt equipment and machinery

Rock pickers Rope

-S- Safety switches Scales and weight tapes Seed treaters Seeds Shovels Silo unloaders Skid steer loaders and fork lifts Soil additives and pasteurizers - soil packers and pulverizers - soil saver cloth Sub soilers

-T- Tarpaulins Thermometers Time temperature recorders Tow cables Tractors (compact utility class or greater) Two way radio equipment for use on farm machinery

-V- Vacuum columns Ventilation equipment for farm buildings Veterinary services and supplies - antibiotics - balling guns - disinfectants - drugs - medicines and medicaments - needles and syringes - obstetrical chains and handles - polypropylene glycol for ketosis - scours tablets - sterilization equipment - thermometers - vaccines - veterinary tools and supplies

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- vitamins - wound dressing

-W- Weed and stubble burners Welding supplies -rental of oxygen and acetylene tanks Wheelbarrows Wool cards REFUNDABLE GOODS The following goods may not be purchased exempt of (PST). However, when purchased by a farmer in possession of a valid Revenue Tax Exemption Permit, for use in a farming operation and for no other commercial purpose, the PST paid may be refunded. All terrain vehicle (4x4 with a minimum 400cc engine displacement) Snowblowers for attachment to tax exempt equipment Snowplows for attachment to tax exempt equipment. Stream crossing building material (culverts, bridge building material) To qualify for the refund a farmer must: 1. Apply in writing; 2. Attach original invoices, receipts and other documentation; 3. Have purchased the goods within 4 years of the date of the application; and 4. Provide sufficient evidence to satisfy the Minister that the goods were used

exclusively in a farming operation. NEW FARMERS

Before you qualify to receive a valid Revenue Tax Exemption Permit, you must pay PST on all goods you use in your business. Once you qualify and have received your Revenue Tax Exemption Permit, you can apply for a refund of PST paid on goods exempt to farmers.

To qualify for a refund, a new farmer must:

1. Apply in writing; 2. Attach original invoices, receipts and other documentation 3. Have purchased goods which were exempt to a farmer at the time of the purchase;

4. Submit evidence of being actively engaged in farming or custom agricultural contracting during the period covered by the application;

5. Submit evidence that the farmer reported income from the sale of products from the farming operation or from the custom agricultural operation during the years covered by the application; and

6. Submit proof that the goods were purchased within 5 years from the date of the application, or within 7 years from the date of the application in the case of a blueberry grower, or within 10 years from the date of the application in the case of an apple or cranberry grower.

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DEFINITION OF FARMER AND FARMING INCOME

For information regarding who qualifies as a farmer for the purposes of the Revenue Tax Exemption Permit and what constitutes income from farming, please see Revenue Tax Guide RTG:175 – Farming Income.

PST REBATE ON FARM STRUCTURES WITH ENVIRONMENTAL BENEFIT A rebate of the PST paid on building supplies used in the construction of identified farm structures with environmental benefit is available to farmers who meet certain eligibility criteria. Eligible farm structures include:

Manure Storages and Covers Pesticide Storages Pesticide Mixing and Filling Areas Petroleum Storage Milk House Waste Management System Silage Effluent Containment Deadstock Composting Facility Feedlots and Livestock Yards Greenhouse Spill Containment

For more information on materials eligible for rebate and other eligibility criteria, please visit the Agriculture, Fisheries and Aquaculture section of the PEI Government website (www.gov.pe.ca) and look under programs. RENEWABLE ENERGY EQUIPMENT TAX EXEMPTION Certain renewable energy equipment is exempt of PST, including:

Organic combustion systems Wind power energy generating systems Biogas energy generating systems Geothermal heat pump energy generating systems Solar thermal energy collection systems Solar photovoltaic energy collection systems Drain water heat recovery energy collection devices

For details on the eligibility of a particular renewable energy system, please see Revenue Tax Guide 164.

http://www.gov.pe.ca/photos/original/pt_rtg175.pdf

http://www.gov.pe.ca/af/agweb/index.php3?number=76684&lang=E

http://www.gov.pe.ca/



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FURTHER INFORMATION For copies of the Revenue Tax Act and Regulations and any inquiries regarding this Revenue Tax Guide, please contact: Taxation and Property Records Division Department of the Provincial Treasury P. O. Box 1330 Charlottetown PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca This guide is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this guide and the statutes, the statutes shall prevail.




Fax: (902) 368-6164

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FIRE FIGHTING EQUIPMENT The Revenue Tax exemption for fire fighting equipment includes rescue trucks and parts thereof. Revenue Tax Act Regulation 16(1)(c), reads:

"Equipment used exclusively for fire fighting and rescue including fire and rescue trucks and parts thereof"

This definition has warranted the expansion of the list of equipment eligible for exemption. It now encompasses the following: axes life nets beepers pike poles blankets resuscitators chain saws rope exhaust fans Scott air packs flashlights stretchers generators tarpaulins inhalators tools jaws of life two way radios life jackets water pumps This guide is prepared for information purposes only. Should there be a conflict between the information contained in this guide and the statutes, the statutes shall prevail. If there are any questions please contact: Taxation and Property Records Division P.O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca




Fax: (902) 368-6164

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RTG: 114 October 1990

REAL PROPERTY RENTALS This Tax Guide is prepared to provide you with a clarification concerning the revenue tax (PST) as it applies to real property rentals and leases of such equipment as furnaces, water heaters, propane tanks, water systems and the like.

(1) Where, under a lease or rental agreement, goods when supplied and installed are treated as if they were real property for the purpose of calculating tax the rental or lease charge is NOT subject to revenue tax (PST). Where a lessor supplies and installs goods, he, the lessor, is required to pay revenue tax (PST) on the cost of the goods.

(2) Where goods are supplied WITHOUT installation under a lease or rental agreement, the lease or rental charges are subject to revenue tax (PST) even though the lessee may eventually have the goods installed. The lessor may purchase the goods without payment of revenue tax (PST) because the tax will be collected and remitted on the lease or rental charges.

This guide is prepared for information purposes only. Should there be any conflict between the information contained in this guide and the statutes, the statutes shall prevail. If further information is required, please contact: Taxation and Property Records Division P.O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca




Fax: (902) 368-6164

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RTG: 115 November 1990

MOBILE AND MODULAR HOMES This guide outlines the proper tax application for the sale of mobile and modular homes on Prince Edward Island. 1. FIRST-TIME SALES OF MOBILE/MODULAR HOMES The first-time sale (on Prince Edward Island) of a Mobile or modular home intended for use as a residence will be subject to tax on a reduced base. Revenue tax (PST) at the rate of 10 percent will apply on 50 percent of the vendor's selling price; inclusive of out-of-province transportation charges, whether or not such transportation charges are stated separately on the invoice. Eligibility for Tax Reduction To be eligible for taxation on a reduced base, the home must: (i) be a mobile home for the purpose of CSA standard Z240, (ii) be a modular home that complies with the National Building Code of Canada, (iii) be a unit not previously sold at retail sale in the Province. Not Eligible for Tax Reduction The following do not qualify for taxation on the reduced base: (i) mobile homes not covered by CSA Z240 standards; (ii) modular homes not complying with the National Building Code of Canada; (iii) mobile industrial or commercial vehicular structures such as construction offices,

bunk houses, kitchen and dining units, libraries, TV units, industrial-display units, laboratory units, and medical clinics;

(iv) recreational vehicles or components such as travel trailers, tent trailers, motor

homes, slide-in campers, chassis-mounted campers or other vehicles, or portable structures of the same general class;

(v) furniture and appliances sold with the home;

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(vi) accessories added at a date subsequent to the date of the original purchase of the

home; (vii) repair parts. Tax Base for Eligible Homes When a home eligible for the reduced tax base is sold, revenue tax (PST) will be calculated on 50 percent of the vendor's selling price to the purchaser. For this purpose, the selling price includes any out-of-province transportation charges to the site on which the home is to be located but does not include charges for installation or connecting to services. The reduced tax base does not apply to appliances and furniture sold with a home. Tax is always payable on 100 percent of the charge applicable to these items, whether they are included in the overall price for the home or charged for separately. When an ineligible home (i.e. construction trailer) is sold, revenue tax (PST) applies to 100 percent of the selling price, exclusive of any charges for installation and service connection. Please note that on a supply-and-install sale, revenue tax (PST) on materials used during installation is the responsibility of the vendor. Billing Procedures Revenue tax (PST) is to be applied in a uniform manner regardless of whether the vendor installs the home and makes service connections for his customer or not. The following items must be shown separately on the invoice to the customer: 1. Selling price of the unit, including out-of-province transportation charges to the customer's

site, whether or not the transportation charges are segregated; 2. Charge for appliances and furniture; 3. Revenue tax (PST); 4. Charge for installation and service connection (if applicable)

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For eligible homes, revenue tax (PST) at the rate of 10 percent is calculated on 50 percent of Item 1 and on 100 percent of Item 2. For ineligible homes, revenue tax (PST) at the rate of 10 percent is calculated on the sum of Items 1 and 2. Example of "Eligible Home" Sale Contract Selling Price $40,000 Less: Transportation and Installation Chgs - 1,000 Taxable Selling Price 39,000 Reduced Taxable Value (39,000 X 50%) 18,500 Tax Due (18,500 X 10%) 1,850 Retail Selling Price of Appliances: refrigerator l,000 stove 800 dishwasher 600 2,400 Tax Due on appliances (@ 10%) 240 Contract Selling Price of Mobile/Modular Home 40,000 Tax Due on Sale 1,850 Retail Selling Price of Appliances 2,400 Tax Due on Appliances 240 TOTAL $44,490 2. USED MOBILE AND MODULAR HOMES In Province Eligible homes that have been sold previously at a retail sale in the Province will be exempt from revenue tax (PST) on all future sales. Appliances and furniture included in the sale of a used home are subject to tax on their full selling price. Out-of-Province Used mobile homes purchased outside the Province are not exempt from revenue tax (PST) and are taxable on the same basis as a mobile home sold for the first time in the Province.

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3. SUPPLY AND INSTALLATION OF MOBILE/MODULAR HOMES Real Property Contracts Mobile/Modular homes supplied and installed onto real property become real property and remain real property as long as they remain affixed to real property. Persons who supply and install mobile/modular homes that are affixed to real property so as to become real property are real property contractors. Real property contractors are the consumers of all goods used to complete real property contracts, and are liable to pay revenue tax (PST) to their suppliers at the time of purchase on the cost of all goods used to complete real property contracts. However, labour charges for installing mobile/modular homes that become real property when installed are not subject to tax. All other materials including lumber and cement used to complete a real property contract are to be purchased by the contractor at the 10% tax rate. Purchases by Registered Dealers A dealer who is registered as a vendor under the Revenue Tax Act can purchase mobile/modular homes for resale purposes without payment of tax by providing his supplier with his vendor registration account number and business class code. The supplier is to record the dealer's vendor registration account number and business class code on the sales invoice, and on all records in connection with the sale in lieu of collecting the applicable revenue tax (PST). The information contained in this guide does not replace the official legislation. Should there be any conflict between the information contained in this guide and the statutes, the statutes shall prevail. All inquires should be addressed to: Taxation and Property Records Division P.O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca




Fax: (902) 368-6164

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RTG: 116 December 1990 (Revised October 2002)

TAX APPLICATION ON COMPUTER HARDWARE AND SOFTWARE This guide is prepared for information purposes only and provides details on the proper application of Prince Edward Island revenue tax (PST) on computer hardware and software and associated topics. Hardware Computer hardware and the fees charged for the installation of such hardware are subject to revenue tax (PST) on the GST included purchase price. Other charges related to computer hardware including rentals, leases and repairs (including parts and labour) are subject to revenue tax (PST) on the GST included purchase price. Computer hardware and the related computer software used exclusively for the control of machinery and apparatus used directly in the manufacture or production of goods for sale are exempt from revenue tax (PST). This exemption does not include computer hardware and the related computer software used simply to monitor manufacturing equipment. Software The cost to purchase, rent or access any pre-written computer software is subject to revenue tax (PST) on the GST included purchase price. The cost of any modifications to and of pre-written computer software is also subject to revenue tax (PST). Computer software designed and developed solely to meet the specific requirements of an individual purchaser is exempt from revenue tax (PST). Training Fees Training fees, including on-site training fees are exempt from revenue tax (PST). Educational and Training Aids Documentation and instructions sold in book or electronic format to assist purchasers in using computer products are not subject to revenue tax (PST), provided they contain no advertisements. All other educational and training aids are subject to revenue tax (PST).

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Licensing and Access Fees “License fees” and “access fees” paid by consumers in Prince Edward Island to access computer programs from another source or network are considered rental or lease fees and as such are subject to revenue tax (PST). See also Revenue Tax Guide RTG:130 - Computer Program Access Fees. Maintenance Charges The fee charged to consumers for maintenance contracts is subject to revenue tax (PST). Parts and labour expended under a maintenance contract are exempt from revenue tax (PST). See also Revenue Tax Guide RTG:139 - Maintenance Contracts - Warranties - Guarantees. Extended Warranties Premiums or fees charged to consumers for extended warranties are exempt from revenue tax (PST). However all parts and labour used to make repairs under an extended warranty are subject to revenue tax (PST). See Revenue Tax Guide RTG:139 - Maintenance Contracts - Warranties - Guarantees. Supplies and Consumables All computer supplies and consumables are subject to revenue tax (PST). Inquiries For further information please contact: Taxation and Property Records Division P.O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca This guide is for information purposes only and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this guide and the statutes, the statutes shall prevail.









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RTG: 117 January 1991 (Revised July 2006, January 2008)

MOTOR VEHICLE RECEIPTS AND GST This Revenue Tax Guide is for the information of ALL registered new automobile dealers in Prince Edward Island and concerns the Motor Vehicle Dealers Receipt form used for recording provincial revenue tax (PST). All new automobile dealers are asked to make sure the amount entered on line one in the box in the lower left hand corner of the receipt form shows the SELLING PRICE of the vehicle INCLUDING the 5% federal Goods and Services Tax (GST). In Prince Edward Island, provincial revenue tax (PST) is collected on the selling price of the goods plus the GST. Reporting and remittance procedures for provincial revenue tax (PST) remain unchanged. Further Information For copies of the Revenue Tax Act, Revenue Administration Act and Regulations and any inquiries regarding this Revenue Tax Guide, please contact: Taxation and Property Records Division Department of Provincial Treasury P. O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca This guide is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this guide and the statutes, the statutes shall prevail.




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RTG: 119 February 1991 (Revised January 1996, July 2006, January 2008)

REVENUE TAX (PST)/GST APPLICATION FOR CONTRACTORS This circular has been prepared to assist you in applying provincial revenue tax (PST) to real property contracts since the implementation of the federal Goods and Services Tax (GST). (A) ON SITE CONTRACTS - Prince Edward Island provincial revenue tax (PST)

application in this area remains unchanged. The contractor is considered the consumer of the goods used in fulfilling a particular contract and tax is due on the landed cost of the materials. No revenue tax (PST) is payable on the contractor's on-site installation or erection labour. The following example may help clarify this interpretation.

Assume a contract has a total price of $20,000 and requires $10,000 worth of materials. The contractor will pay 5% GST and 10% revenue tax (PST) for a total landed cost of $11,550. Cost of materials $10,000.00 GST at 5% 500.00 10,500.00 Revenue tax (PST) at 10% 1,050.00 11,550.00 Labour 8,047.62 GST on Labour at 5% 402.38 TOTAL $20,000.00 The revenue tax (PST) to be remitted in this example is $1,050.00. (B) MANUFACTURING CONTRACT - As in the past, if the materials are manufactured

and installed by the same firm, then tax is payable at the rate of 10% on the manufactured cost. Manufactured cost includes the cost of material, shop labour, overhead, transportation, administration, and GST. Profit and erection labour are not included.

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FOR EXAMPLE: Cost of manufactured materials $135,000 GST at 5% 6,750 Manufactured Cost 141,750 Revenue tax (PST) at 10% 14,175 $155,925 Installation labour 70,000 Profit 50,000 GST on labour and profit at 5% 6,000 TOTAL CONTRACT $281,925 In this example the revenue tax (PST) to be remitted is $14,175 based on the manufactured cost of the materials. Further Information For copies of the Revenue Tax Act, Revenue Administration Act and Regulations and any inquiries regarding this Revenue Tax Guide, please contact: Taxation and Property Records Division Department of Provincial Treasury P. O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca This guide is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this guide and the statutes, the statutes shall prevail.




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RTG: 120 April 1992 (Revised August 2003)

TAX EXEMPT GOODS FOR COMMERCIAL FISHERMEN The following goods may be purchased by a commercial fisherman, who is in possession of a valid Revenue Tax Exemption Permit, exempt of revenue tax (PST) when purchased for use in a fishing operation and for no other commercial purpose.

-A- -Aluminum pen boards and stanchions -Anchors, mooring, trap and trawl -Anti-fouling compound -Aprons

-B- -Bait -Bait freezers -Barometers -Batteries for boats -Bilge pumps -Binnacles -Bluestone -Boat bailers -Boats (fishing), dinghies, dories, skiffs and scows -Buoys, floats and markers -Burlap net covers

-C- -Cables -Chafing gear or hides -Chains -Charts, tide and navigation -Chocks -Cleaning tools including brushes mops and brooms -Clocks for boats -Connectors -Counters, tallying -Crates, scale baskets and stowage and storage baskets

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-D- -Depth sounders -Dipnets -Direction finders -Dye for nets and traps

-E- -Electric light bulbs for use on boats (6, 12 and 32 volts) -Electric motors for operating pumps and equipment -Engine room telegraph -Engines for boats

-F- -Fast eye blocks -Fenders -Fish bugs, hooks, jigs, lines,lures and sinkers -Fish storage tanks -Fishing nets and netting -Floats for nets -Fog horns and bells -Forks

-G- -Gaffs -Galley stoves and ranges -Galvanized steering blocks -Gas tanks for boats -Gloves -GPS equipment -Grub hoes -Gurdies

-H- -Hatch covers -Hoists on boats -Hydraulic pumps, motors, fittings, hoses and valves -Hydraulic steerers and auto pilots

-I- -Ice making machines

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-K- -Knives, splitting, skinning, filleting, gutting and shucking and other such equipment

-L- -Lamps for use on boats -Lobster measures, plugs and rubber bands -Lobster traps -Loose hook blocks

-M- -Marine paint -Marine refrigerators -Marine stoves and furnaces -Marine toilets and sinks -Measuring boards -Mending twine for nets -Moss rakes -Motors, inboard and outboard for fishing boats

-N- -Navigation and port lights -Needles for netting -Net moorings and winches -Nets -Netting leads

-O- -Oars -Otter chains, discs, lifters, rollers and spacers -Otter combination rope -Otter trawl door and floats -Otter trawl leather, nets -Oyster harrows, rakes, scoops, scythes, spreaders, threshers and tongs

-P- -Pails -Parts for any goods in this section -Power blocks -Preservatives for nets and lines -Propellers -Pumps for boats

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-Q- -Quadrants

-R- -Radar equipment -Radio telephones for fishing boats -Refrigeration equipment for fishing boats -Repair labour to service any goods referred to in this section -Resin and fibreglass matting -Rope -Row locks -Rubber clothing and footwear

-S- -Sails for fishing boats -Scallop bags and ties -Seam paint and filler -Shackles -Shovels -Signal bells -Snatch blocks -Stays -Survival suits

-T- -Tarpaulins -Tide tables -Trap dumpers, haulers and lifters -Trolling bells, blocks, springs and swivels -Turnbuckles

-V- -Ventilators

-W- -Wash down pumps for boats -Weigh scales -Wet suits -Winches and pulleys on boats -Wire cable

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Further Information For copies of the Revenue Tax Act and Regulation and any inquiries regarding this Revenue Tax Guide, please contact; Taxation and Property Records Division Department of the Provincial Treasury P. O. Box 1330 Charlottetown PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca This guide is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this guide and the statutes, the statutes shall prevail.




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RTG: 121 April 1991 (Revised June 1998, July 2005)

ENVIRONMENT TAX On April 10, 1991 an Environment Tax was levied on all new pneumatic tires purchased or consumed in the Province of Prince Edward Island. This Revenue Tax Guide outlines the application of the tax and the procedures for collecting and remitting the tax. New Pneumatic Tires A $4.00 Environment Tax applies to each new pneumatic tire purchased or consumed in the province. This includes both inflatable tires and solid tires (doughnuts) designed for use as spare tires for motor vehicles. A motor vehicle is defined under Section 1 (a) of the Environment Tax Act as a passenger car, automobile, motorcycle, truck, bus, truck tractor, tractor trailer or similar mobile equipment designed and used for the transportation of passengers or goods including construction equipment and tractors, combines or other agricultural implements. Who Pays The Tax? With the exceptions noted on the following pages, all persons who purchase new pneumatic tires are required to pay the Environment Tax at the time of purchase. Pneumatic tires are considered new up to the time of their first retail sale subsequent to their manufacture. Non-Residents: Non-residents of Prince Edward Island who purchase and take delivery of a new pneumatic tire in the province are required to pay the tax even if the tire will later be removed from the province. The Environment Tax paid by non-residents is not refundable. Lessors: Persons who lease goods as lessors are required to pay the Environment Tax on new pneumatic tires acquired for use on their lease stock. Lessors must pay the tax to their suppliers at the time the tires are purchased. Lessees are not required to pay the Environment Tax on tires included with the item being leased. Motor Vehicle Dealers: Motor Vehicle dealers are required to pay the Environment Tax on new vehicles taken out of inventory and dedicated to a specific use by the dealer such as parts delivery vehicles, tow trucks and the like. On new vehicles that are used by dealers as demonstrators while held in inventory, the Environment Tax becomes due and payable by the purchaser when the vehicle is sold.

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Additional information on the application of the Environment Tax to sales and leases of motor vehicles may be obtained by contacting the Taxation and Property Records Division. Replacements, Exchanges, Warranties: When a customer purchases goods that include new pneumatic tires and as part of the sale agreement, the tires are exchanged for a different style or brand, the tax applies only once. That is, provided that the original tires are in such condition that they can be sold as new, the tax applies only to the replacement tires. Where a tire fails as a result of a manufacturing defect and is replaced at no charge, the tax does not apply to the replacement. If the customer is required to pay a portion of the cost of the replacement tire or if the customer chooses to pay the additional cost of a tire of a higher price than that which would be replaced at no charge under warranty, the tax applies. Who Does Not Pay The Tax? Vendors: New pneumatic tires acquired by a registered vendor for the sole purpose of resale are not subject to the tax provided the vendor quotes his or her vendor registration account number to the supplier. However, if the tire is subsequently taken out of inventory and used for any business or personal use, the vendor is required to remit the applicable tax with his Environment Tax return. Shipments Out of Province: The Environment Tax does not apply when the tires are purchased by non-residents and shipped by the seller to a location outside of the province. The seller is required to maintain documentation relating to out of province delivery to substantiate the non-collection of the tax on that sale. Purchases for Wheelchairs or Three Wheeled Vehicles: Purchasers of new pneumatic tires acquired for use on a wheelchair or a three wheeled device designed for the transportation of handicapped persons are not required to pay the tax provided that the following information is recorded on the sales invoice (1) certification that the tire is acquired for such use, and (2) name, address, telephone number and signature of the purchaser. The seller must retain a copy of the signed invoice to substantiate the non-collection of the tax on that sale. Collecting the Tax Any person registered or required to be registered under the Revenue Tax Act and the Environment Tax Act shall collect Environment Tax. All vendors are required to collect the tax from their customers at the time the sale takes place. The tax applies to each new pneumatic tire sold separately or included with the item sold. For example, when a new automobile is sold, the vendor is required to collect a total of $20 in Environment Tax; $4 for each of the five tires included with the automobile.

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The tax must be indicated separately from revenue tax (PST) and from the purchase price on the bill of sale. The tax is in addition to the revenue tax (PST) payable on the purchase price of the item being sold. However, the tax is not part of the purchase price and therefore is not subject to revenue tax (PST). For example; If a new automobile is purchased for $15,000, the vendor is required to collect $1,500 in revenue tax (PST) plus $20 in environment tax. Remitting the Tax The environment tax collected by vendors, or payable on items taken out of stock for business or personal use, are to be reported separately and remitted at the same time as the revenue tax (PST) collected on those sales or purchases. Returns must be filed no later than the 20th day of each month and must report and remit the tax collected in the preceding month. Please note that the penalty and interest charges for late filing of revenue tax (PST) returns also apply to environment tax. This guide is prepared for information purposes only. Should there be any conflict between the information contained in this guide and the statutes, the statutes shall prevail. Further information on the application, collection and remittance of environment tax may be obtained by contacting: Taxation and Property Records Division P.O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca




Fax: (902) 368-6164

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RTG: 122 APRIL 1991

FARM AND GARDEN SUPPLIES The general exemption on the following farm and garden supplies has been removed from section 12 of the Prince Edward Island Revenue Tax Act. These items are now subject to the provincial revenue tax (PST) of 10%. Seeds Fruit Producing Trees Shrubs Plants Fungicides Weed Control Chemicals Fertilizer Limestone It should be noted, however, that the above listed items will continue to be tax exempt to full time farmers only. This guide is prepared for information purposes only. Should there be a conflict between the information contained in this guide and the statutes, the statutes shall prevail. Further information may be obtained by contacting: Taxation and Property Records Division P.O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca




Fax: (902) 368-6164

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RTG: 123 May 1991 (Revised July 2006, January 2008)

CARPET DEALERS AND REVENUE TAX (PST) For the purposes of collecting and remitting provincial revenue tax (PST), carpet dealers in Prince Edward Island can be classed as both RETAILERS and CONTRACTORS depending on the type of sale involved. 1. RETAILER: If carpet is sold to a customer who installs it himself, the carpet dealer

would be classed as a Retailer and would collect the revenue tax (PST) on the total selling price including the goods and services tax (GST). Tax collected on this type of transaction must be shown on the customer's invoice and reported under the “Tax on Sales” section on the Vendor's Return.

2. CONTRACTOR: If carpet is sold with the agreement that the dealer or his agent will

install the carpet using adhesive, tackless stripping, or any other method which affixes the carpet to the floor or wall, the carpet dealer would be classed as a Contractor and would be required to pay revenue tax (PST) on the cost of all materials used, including transportation costs and GST.

FOR EXAMPLE: Landed cost of materials $1,000.00 GST at 5% 50.00 $1,050.00 PST at 10% 105.00

The $105.00 PST in this example must be reported under the “Tax on Purchases” section of the Vendor's Return and should NOT appear on the customer's invoice.

Separate records should be maintained covering each type of transaction and the proper application of the revenue tax (PST).

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Further Information For copies of the Revenue Tax Act, Revenue Administration Act and Regulations and any inquiries regarding this Revenue Tax Guide, please contact: Taxation and Property Records Division Department of Provincial Treasury P. O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca This guide is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this guide and the statutes, the statutes shall prevail.




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RTG: 124 May 1991

MEAL REPLACEMENT PRODUCTS Meal replacement products sold in Prince Edward Island will NOT be subject to provincial revenue tax (PST). Meal replacement shakes and bars, such as the Slim-Fast products will now be sold tax exempt to consumers. The change in the tax application on meal replacement bars is a result of a ruling by the Goods and Services Tax Policy Section of the Canada Revenue Agency. The ruling states that meal replacement bars are considered to be basic groceries for purposes of the Goods and Services Tax and therefore are zero-rated. The provincial revenue tax (PST) on meal replacement bars is removed to assist in easing the burden of tax application for registered retail vendors. This guide is prepared for information purposes only. If there is any conflict between the information contained in this guide and the statutes, the statutes shall prevail. If further information or assistance is required, please contact: Taxation and Property Records Division P.O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca




Fax: (902) 368-6164

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RTG: 125 January 1994 (Revised September 1994, July 2006, January 2008)

ADVERTISING AND PROMOTIONAL SERVICES This Revenue Tax Guide is prepared to provide important information to Advertising Agencies, Public Relations, Communications and Media Consultants, Graphic Design Firms and Audio/Video Recording Studios concerning the proper application of provincial revenue tax (PST). All of the above types of firms provide professional services to clients on a contract basis. On September 1, 1993, professional services provided by consultants became subject to provincial revenue tax (PST). Advertising Agencies, Public Relations, Communications and Media Consultants, Graphic Designers and Recording Studios are now required to charge revenue tax (PST) on their professional service fee. However, the firm is still required to pay sales tax on all materials used and consumed in creating the "master" copy or prototype. When billing clients on completion of a contract, revenue tax (PST) is charged on the GST included professional service fee, but not on the cost of the materials consumed in creating the "master" copy or prototype, or on any disbursements or out-of-pocket expenses. AN EXAMPLE OF A PROPER INVOICE IS: Fee for services $500.00 5% GST 25.00 $525.00 10% PST 52.50 $577.50 EXPENSES: Supplies and materials $100.00 mileage 30.00 fax charges 25.00 Total Expenses $155.00 Total to client $732.50 In the above example the revenue tax (PST) applies only to the professional service fee charged by the firm. However, if the invoice is not broken out to show separately the professional service fee and the disbursements and out-of-pocket expenses, then the revenue tax (PST) would apply to the total invoice amount.

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EXAMPLE: Creation of ad $1,000.00 5% GST 50.00 $1,050.00 10% PST 105.00 Total invoice amount $1,155.00 Copies of audio and video tapes and printed materials taken from a "master" copy or prototype are always subject to revenue tax (PST) and the tax must be billed to the client on the total cost of producing the copies. Agencies and firms registered with Taxation and Property Records Division and in possession of a valid vendor registration certificate, may purchase printing or recording services exempt of revenue tax (PST) by quoting their vendors registration number (account number and class code), as long as the materials are being purchased for resale to the client. Revenue tax (PST) on the printed or recorded material would be billed to and collected from the client by the agency or firm. Further Information For copies of the Revenue Tax Act, Revenue Administration Act and Regulations and any inquiries regarding this Revenue Tax Guide, please contact: Taxation and Property Records Division Department of Provincial Treasury P. O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca This guide is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this guide and the statutes, the statutes shall prevail.




Fax: (902) 368-6164

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TAX APPLICATION - VETERINARY SUPPLIES On April 10, 1991, as a result of changes announced in the provincial budget by the Minister of Finance, the general exemption on medicaments was removed and all such items became taxable and subject to the 10% provincial revenue tax (PST). Section 12(1)(h.2) of the Revenue Tax Act states; "a consumer is not liable to pay the tax in respect of the consumption of the following goods: drugs and medicines, when purchased on the prescription of a medical practitioner, dentist or veterinarian." This means all drugs and medicines sold on the prescription of a veterinarian are exempt from revenue tax (PST). All other drugs, medicines and supplies sold over the counter or off the shelf without the requirement of a prescription are taxable and are subject to the 10% revenue tax (PST). Full time farmers may purchase veterinary supplies as outlined in Section 25 of the Revenue Tax Act Regulations tax exempt whether purchased on a prescription or not. (See Revenue Tax Guide RTG:109 - Tax Exemptions For Farmers). All non-prescription drugs, non-prescription medicines, and veterinarian supplies sold over the counter to any person other than a full time farmer are taxable and the revenue tax (PST) must be added to the price of the item including GST where applicable. Further Information For copies of the Revenue Tax Act, Revenue Administration Act and Regulations and any inquiries regarding this Revenue Tax Guide, please contact: Taxation and Property Records Division Department of Provincial Treasury P. O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca This guide is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this guide and the statutes, the statutes shall prevail.





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RTG: 127 June 1994 (Revised November 1999)

FLEA MARKET VENDORS Provincial revenue tax (PST) must be collected and remitted on the sale of all taxable goods at commercial flea markets. Persons operating as occasional vendors for the purposes of retailing at commercial flea markets are required to collect the 10% provincial revenue tax (PST) and remit it immediately following the flea market on a "Revenue Tax (PST) Self-Declaration" form, available from the Taxation and Property Records Division and at all Access P.E.I. locations throughout the Province Registered vendors selling at flea markets are to remit the taxes collected with their regular vendor return form. This guide is prepared for information purposes only. If there is any conflict between the information contained in this guide and the statutes, the statutes shall prevail. If you have any questions concerning the collection and remittance of provincial revenue tax (PST), please contact: Taxation and Property Records Division P.O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca

http://www.gov.pe.ca/forms/pdf/403.pdf




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RTG: 128 April 1992

TAX APPLICATION - ACCOMMODATION CHARGES The application of provincial revenue tax (PST) on accommodation charges was amended in 1992. Effective April 1, 1992, accommodation charges of less than $20.00 per night will no longer be subject to revenue tax (PST). Accommodation charges of $20.00 or more per night will continue to be subject to revenue tax (PST) on the full GST included amount. Another change in the tax application on accommodation charges involves the length of stay of a person. Previously, persons were exempt from revenue tax (PST) if they had a lease agreement or resided continuously at the same address for a period of at least 60 days. That time limit has now been reduced to 30 days. This guide is prepared for information purposes only and should not be considered a substitute for the statutes. If there is a conflict between the information contained in this guide and the statutes, the statutes shall prevail. If you have any questions regarding the application of provincial revenue tax (PST) please contact Taxation and Property Records Division P.O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca




Fax: (902) 368-6164

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RTG: 129 June 1992 (Revised April 2005)

ENVIRONMENT TAX - "NEW" TIRE DEFINITION REVISED The revised definition of a "new" tire has been amended to state that a tire is considered to be new until after its first purchase at a retail sale in the province. This definition makes it clear that any tire, is considered to be a new tire until it is sold at retail for the first time in Prince Edward Island and is subject to the $4.00 environment tax. Tires previously sold in Prince Edward Island are NOT subject to the environment tax. Persons purchasing motor vehicles in another province and bringing them into Prince Edward Island will be assessed the environment tax of $4.00 per tire when they register the vehicle at an Access P.E.I. location for the first time. The tax will be collected by the staff of Access P.E.I. at the time of the initial registration of the vehicle in this province. This guide is prepared for information purposes only. If there is any conflict between the information contained in this guide and the statutes, the statutes shall prevail. If there are any questions regarding this guide or the Environment Tax, please contact: Taxation and Property Records Division P.O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca




Fax: (902) 368-6164

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RTG: 130 April 1993

COMPUTER PROGRAM ACCESS FEES Fees paid by vendors in Prince Edward Island to access computer software from another source or network, are deemed to be rental or lease fees and are subject to Prince Edward Island revenue tax (PST) on the GST included payment fee. Computer software programs developed by a national company and made available to independently owned franchise branches or dealers are considered to be pre-packaged programs and as such are taxable pursuant to subsection 1(e)(iii) of the Revenue Tax Act and sub section 1(g.1) of the Revenue Tax Act Regulations. Such fee payments are considered to be "right to use" payments and are considered to be the same as a lease or rental payment. Prince Edward Island revenue tax (PST) applies whether the fee is paid on a regular monthly contract basis or as a pay-per-use charge. This guide is for information purposes only and should not be used as a substitute for the statutes. If there is any conflict between this guide and the statutes, the statutes shall prevail. If further assistance is required regarding this tax application, please contact: Taxation and Property Records Division P.O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca




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RTG: 131 April 1993 (Revised July 2006, January 2008)

TAX APPLICATION ON COUPONS Coupons, discounts and giveaways have several different forms and the application of Prince Edward Island revenue tax (PST) varies depending on the type of coupon, discount or giveaway that is being used. This guide provides a brief explanation of the types of coupons, discounts and giveaways that are commonly used in this province and where possible includes an example of the proper application of revenue tax (PST). 1. Cash or Bonus Coupons: These are coupons such as Canadian Tire Money that may be redeemed in a retail outlet and used the same as actual cash to purchase goods. In this case the revenue tax (PST) is calculated on the GST included actual selling price of the item BEFORE deducting the value of the coupon. EXAMPLE: Taxable item $5.00 Plus 5% GST .25 5.25 Plus 10% PST .53 5.78 Less coupon value 1.00 Cost to consumer $4.78 2. Discount Coupons: These are usually manufacturers or store coupons that may be used by a purchaser as partial payment for a specifically named product on the coupon. In this case the coupon actually reduces the selling price of the taxable product or item and therefore the revenue tax (PST) is calculated on the GST included reduced selling price. In other words the tax applies to the actual price paid by the purchaser. EXAMPLE: Taxable item $5.00 Plus 5% GST .25 5.25 Less coupon value 1.00 4.25 Plus 10% PST .43 Cost to consumer $4.68

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3. TWO FOR ONE DISCOUNT: This is a case where a retailer offers two of a particular item or product for the price of one such as a "buy one get one free" promotion. As consumption occurs at the same time, this case is considered to be a price reduction and the revenue tax (PST) would be applied to the GST included actual amount paid by the consumer. 4. BUY SIX GET ONE FREE: This type of situation usually involves meals, snacks or accommodation etc. where actual consumption takes place over a period of time. For example, a restaurant may offer a "free" meal after an individual purchases six meals on six different occasions. The "free" meal is considered a giveaway and the revenue tax (PST) on the "free" item is to be paid by the vendor on his or her GST included cost. The customer, in this case is not liable to pay the revenue tax (PST). Further Information For copies of the Revenue Tax Act, Revenue Administration Act and Regulations and any inquiries regarding this Revenue Tax Guide, please contact: Taxation and Property Records Division Department of Provincial Treasury P. O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca This guide is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this guide and the statutes, the statutes shall prevail.




Fax: (902) 368-6164

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RTG: 132 May 1993 (Revised November 2007)

FABRIC AND ACCESSORIES Fabrics, felt and hat bindings, pellon, backing and lining material, wool, yarn, clothing patterns, zippers, buttons, bindings, thread, dress fasteners, hooks and eyes, and such supplies purchased for use in making or repairing clothing are exempt from revenue tax (PST). Labour charges to make or repair clothing are also PST exempt. Fabric, wool and all sewing supplies used to make non-clothing items, such as drapes, rugs, slip covers, etc. are NOT exempt and are subject to PST. Labour charges to make or repair non-clothing items are taxable. Equipment and supplies used to make or repair clothing or non-clothing items, such as scissors, needles, and sewing and knitting machines, are NOT exempt, and are subject to PST. FURTHER INFORMATION: For copies of the Revenue Tax Act and Regulations and any inquires regarding this Revenue Tax Guide, please contact:






Fax: (902) 368-6164

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RTG: 135 July 1993

SNACK FOODS The 1993 budget address on June 17, 1993 broadened the provincial revenue tax base by applying the 10% provincial revenue tax (PST) to snack foods The following list of snack foods is now subject to revenue tax (PST) on the GST included retail selling price. -potato chips -potato crisps -popcorn (popped) -potato puffs -pretzels -potato curls -nuts (salted and unsalted) -potato sticks -edible seeds -cheezies -cheese puffs -trail mixes -corn chips -milk shakes -pudding pops -bits and bites -popsicles -sundaes -fruit bars -slush -fruit roll-ups -ice cream bars -ice cream sandwiches -fudgicles -granola products (not including cereals) -flavoured, coloured or sweetened ice water, whether frozen or not -cheese and cracker snack packs -cheese, cracker and meat snack packs -pickled eggs -pickled wieners single servings of: -ice cream -sherbet -ice milk -frozen yogurt -cakes -pies -puddings -muffins -pastries -tarts -cookies -doughnuts -brownies -cinnamon rolls -croissants with sweetened filling or coating

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Candy and confectionery products have always been subject to revenue tax (PST) when purchased at a price of 50 cents or more. THERE IS NO CHANGE IN THE TAX APPLICATION ON CANDY AND CONFECTIONERY PRODUCTS. These products include: -bulk candy -chocolates -chocolate bars -candy floss -cotton candy -candy apples -chewing gum -cracker jacks -caramel corn -life savers -breath mints -cough drops -coated fruit, nuts and seeds Provincial revenue tax (PST) does NOT apply to the following items: -white milk -chocolate milk -yogurt -fruit juices This is not an exhaustive list and is intended as a guide only. If there is any conflict between the information in this guide and the statutes, the statutes shall prevail. For further information please contact:

Taxation and Property Records Division P.O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164

Website: www.taxandland.pe.ca




Fax: (902) 368-6164

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RTG: 136 September 1993 (Revised July 2002)

APPRAISALS FOR PRIVATE MOTOR VEHICLE SALES "Fair value" for revenue tax (PST) purposes on private sales of motor vehicles pursuant to clause 1(d)(iii) of the Revenue Tax Act, may be determined in one of three ways; 1. The stated purchase price 2. The average wholesale value as set out in the Canadian Red Book or the Canadian Sport Vehicle Blue Book 3. On a written appraisal from a new car dealer or licensed appraiser. This guide deals with the information required for an appraisal to be accepted for taxation purposes. 1. The appraisal must be presented on the official letterhead of the new car dealer or licensed appraiser. 2. The name and address of the person requesting the appraisal. 3. The year, make, model and serial number of the vehicle being appraised 4. The net appraised value of the vehicle. 5. The date of the appraisal. 6. The signature of the person doing the appraisal. Persons requesting appraisals should be advised that the appraised value will be recognized for revenue tax (PST) purposes only if the appraisal is dated within 90 days after the date of purchase of the vehicle. Purchasers of cars and light trucks at a private sale where the federal goods and services tax (GST) will not be collected are required to pay provincial revenue tax (PST) at the rate of 12.5% on the fair value of the vehicle. This guide has been prepared for information purposes only and should not be used as a substitute for the legislation. Should there be any conflict between the information in this guide and the legislation, the legislation shall prevail.

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All inquiries respecting the application of revenue tax (PST) on private sales of motor vehicles should be directed to:






Fax: (902) 368-6164

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RTG: 137 September 1993 (Revised January 2001)

TAX APPLICATION - SERVICES Provincial revenue tax (PST) on certain services came into effect on September 1, 1993. Pursuant to subsection 1(e)(iv) of the Revenue Tax Act, R.S.P.E.I. 1988, Cap. R-14, the following definitions will apply to certain specific taxable services:

1. ACCOUNTING SERVICES means services in the nature of the investigation or audit of accounting records, preparation of balance sheets and profit and loss amounts, and other similar services including bookkeeping, payroll preparation and billing, cost accounting and tax return preparation, but does not include services provided by a person to that person’s employer in the course of employment.

2. ARCHITECTURAL SERVICES means those services provided by a person conducting the "practice of architecture", as defined in clause 1(p) of the Architects Act R.S.P.E.I. 1988, Cap. A-18.1, but does not include services provided by a person to that person's employer in the course of employment;

. 3. CONSULTING SERVICES means services that are in the nature of advice or opinions provided for fee, gain or reward. Services involved in the conduct of trade under the Apprenticeship and Trades Qualification Act are NOT included.

An exemption from revenue tax (PST) is provided for “consulting services” IN THE AREAS OF:

agriculture day care education fisheries financial services, other than accounting services health care insurance human and veterinary medicine real estate pharmaceutical dispensing tourism

4. ENGINEERING SERVICES means those services provided by a person conducting "professional engineering" or the "practice of engineering" as defined in the P.E.I. Engineering Profession Act. Services provided by an employee for his/her employer are NOT included.

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5. LEGAL SERVICES means services provided by a person conducting the "practice of law" as defined in the P.E.I. Legal Profession Act. Service provided by or through the Legal Aid Program, Family Legal Aid services administered by the P.E.I. Law Foundation, and services provided by an employee for his/her employer are NOT included.

Revenue tax (PST) is to be applied to the GST included “services fee” only. Disbursements and out-of-pocket expenses such as the cost of meals, accommodation, mileage, telecommunications, photocopying etc. are not subject to revenue tax (PST) if shown separately on the bill or invoice. Fixed price, lump sum contracts signed prior to September 1, 1993 will be honoured as written and will be exempt of revenue tax (PST), but all other contracts will be subject to revenue tax (PST). Retainer fees are not considered to be contracts and are therefore taxable. Taxable services provided to a firm or individual for consumption in another province or jurisdiction are NOT subject to revenue tax (PST). However, taxable services provided by a firm or individual resident in another jurisdiction for consumption by a client in Prince Edward Island ARE subject to revenue tax (PST). This guide is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this guide and the statutes, the statutes shall prevail. For copies of the Revenue Tax Act and Regulations and any inquiries regarding this Revenue Tax Guide please contact:






Fax: (902) 368-6164

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RTG: 138 March 1994

TAX APPLICATION ON FEDERAL GOVERNMENT CONTRACTS Contractors on Prince Edward Island dealing with the Federal Government should be aware of the proper application of provincial revenue tax (PST) on these contracts. Retail sales to federal government departments may be made exempt of revenue tax (PST) only if the purchase of the goods at retail is made on an official federal government purchase order. Real property contracts for the federal government are to be treated by contractors the same as a contract with any other customer. The contractor is considered to be the consumer of the goods used in fulfilling the real property contract and is therefore responsible for the payment of the revenue tax (PST) on the landed cost of these goods. Labour costs on real property contracts are exempt of revenue tax (PST). This guide has been prepared for information purposes only. If there is any conflict between this guide and the statutes, the statutes shall prevail. For further information please contact:






Fax: (902) 368-6164

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RTG: 139 May 1994

MAINTENANCE CONTRACTS - WARRANTIES - GUARANTEES Most goods classed as tangible personal property are sold at retail with some form of guarantee, warranty or maintenance contract to insure customer satisfaction with the product. This guide provides information for retailers regarding the proper application of Prince Edward Island revenue tax (PST) on guarantees, warranties, extended warranties and maintenance contracts. 1. MANUFACTURERS GUARANTEES: Most goods sold to consumers come with a limited time manufacturers guarantee against defects and workmanship. If a product under guarantee is repaired at no cost to the consumer, then revenue tax (PST) does not apply. The cost of the guarantee in this case is included in the retail selling price of the goods. 2. SPECIFIC WARRANTIES: This type of warranty usually covers specific parts and usually extends beyond the limited time manufacturers guarantee. Most warranties of this type include a deductible charge or fee to be paid by the consumer. The deductible amount or fee paid by the consumer is subject to revenue tax (PST). However, the parts and labour used in any repairs to the product are exempt of revenue tax (PST). 3. EXTENDED WARRANTIES: With most extended warranties a fee is paid by the purchaser to a third party, much like an insurance premium. This fee or premium is not subject to revenue tax (PST) but all parts and labour expended in repairing goods under this type of warranty are subject to revenue tax (PST) and the tax is payable by the third party to whom the extended warranty fee or premium is paid. 4. MAINTENANCE CONTRACTS: Maintenance contracts offered by retailers on goods they sell usually involve a fee paid by the purchaser or consumer. Usually a maintenance contract includes a physical check of the product on an agreed periodic schedule. This fee is subject to revenue tax (PST). However, parts and labour expended under a maintenance contract are exempt of revenue tax (PST). 5. SERVICE CONTRACTS: Retailers may offer service contracts on goods they sell. This service contract usually involves a fee regardless of whether or not the product needs servicing or repair. The fee charged for a service contract is subject to revenue tax (PST) but all parts and labour used to carry out the service contract would be exempt of revenue tax (PST).

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This guide is issued for information purposes only. If there is a conflict between the information contained in this guide and the statutes, the statutes will prevail. If further information is required please contact:






Fax: (902) 368-6164

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RTG: 140 July 1994 (Revised May 2002)

APPLICATION OF SALES TAX ON SALES BY SERVICE CLUBS Service clubs on Prince Edward Island are engaged in numerous fund raising activities that involve the selling of taxable goods to members and the general public. Clubs engaging in such activities are required to register as vendors under the Revenue Tax Act and are obligated to collect and remit provincial revenue tax (PST) on these sales. This Revenue Tax Guide is prepared to assist service clubs in the proper application of revenue tax (PST) on sales of taxable goods. Revenue tax (PST) is applied to all taxable goods. Items such as calendars, glasses, key chains and other promotional items are subject to revenue tax (PST) of 10% on the GST included selling price. Candy and other confections classed as candy are taxable at a selling price including GST of 50 cents or more. Service clubs with liquor licenses are allowed to sell alcoholic beverages tax included. The revenue tax (PST) applies to all alcoholic beverages sold and the tax must be reported on the Vendor Return form and remitted to Taxation and Property Records. To calculate the amount of revenue tax (PST) to be remitted on the sales of alcoholic beverages, the following formula may be used: TOTAL BEVERAGES SOLD x .0909 = TAX DUE AND PAYABLE EXAMPLE: Total sales - $250.00 x .0909 = $22.73 revenue tax (PST) due. Admission prices charged for entrance to special events (concerts, dances etc.) are also subject to revenue tax (PST) which is usually included in the price of admission. To calculate the revenue tax (PST) due and payable on admission charges, the above formula may also be used. TOTAL ADMISSIONS SOLD x .0909 = TAX DUE AND PAYABLE EXAMPLE: Total admissions sold - 200 at $3.00 200 x $3.00 = $600.00 x .0909 = $54.54 revenue tax (PST) due

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NOTE: Section 41 of the Revenue Tax Act Regulations require the owners of locations where special events are held to collect and remit the provincial revenue tax (PST) on all admission charges. This guide is prepared for information purposes only. If there is a conflict between the information in this guide and the statutes, the statutes shall prevail. If there are any questions please contact:






Fax: (902) 368-6164

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RTG: 141 April 1995

SALES TAX APPLICATIONS FOR LAUNDERERS AND DRYCLEANERS Provincial revenue tax (PST) applies to the GST included price of services provided by laundry and dry-cleaning establishments in Prince Edward Island. The taxable services include cleaning, dry-cleaning, laundering, dyeing and waterproofing of: - all articles of clothing;

- such goods as bedding, table linen, towels, curtains, drapes, slip covers and wiping or cleaning rags;

- hats, including the blocking of same; - furs and fur coats. Revenue tax (PST) also applies to the following supplies used or consumed by the laundry and/or dry-cleaning plant when providing the above services: Alkali, Detergent, Spotting Chemicals, Bleach and Dry-cleaning Fluid. The following items which form a part of the finished product may be purchased by the laundry and/or dry-cleaning plant exempt of revenue tax (PST):

Starch, Sizing, Softener, Waterproofing, Fire Retardant, Odour Remover, Abstergents Lubricant Dry-cleaning, Hangers, Paper Bags, Wrapping Paper, Plastic and Poly Bags, Foam Guards, Hanger Guards, Wrapping or Packaging Tape, Safety Pins and Identity Tags.

This guide is for information purposes only and should not be used as a substitute for the statutes. If there is a conflict between the information in this guide and the statutes, the statutes shall prevail. Any questions concerning the contents of this Revenue Tax Guide should be referred to:






Fax: (902) 368-6164

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RTG: 142 April 1995

SALES TAX INFORMATION FOR PHOTOGRAPHERS/PHOTO ENGRAVERS Photography and/or photo engraving includes the development of negatives and the preparation and printing of finished photographs. The GST included charges for these services are subject to provincial revenue tax (PST) regardless of whether or not each service is charged separately or the charge for both services is combined. The price charged for developing film is also subject to provincial revenue tax (PST) even if the customer requires no finished prints. Materials purchased by photographers which become an ingredient or a component part of the finished photo are exempt of revenue tax (PST) when purchased by a photographer. The revenue tax (PST) is collected from and paid by the consumer. Examples of such materials would be film, mounts, frames, photographic paper and the like. For purposes of the Prince Edward Island Revenue Tax Act, photographers are considered to be manufacturers and therefore equipment purchased by a photographer such as cameras, trays, stands, lights developing and printing chemicals and the like do not attract provincial revenue tax (PST) when used in the production and processing of photographs. Sales of frames, photographs, cameras, film and other photographic equipment and supplies to consumers are considered to be retail sales and as such are subject to revenue tax (PST) on the GST included retail selling price. This guide is prepared for information purposes only and should not be considered a substitute for the statutes. If there is a conflict between the information contained in this guide and the statutes, the statutes shall prevail. Further information may be obtained by contacting:






Fax: (902) 368-6164

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RTG: 143 June 1995

REPAIRS TO LEASED AND/OR RENTED VEHICLES Parts and labour expended in the repair of motor vehicles are subject to Prince Edward Island revenue tax (PST) on the GST included cost of both the parts and labour. Repairs to leased or rented vehicles, including both parts and labour, are also subject to provincial revenue tax (PST) and the proper application of the tax will depend on the type of lease or rental agreement accompanying the vehicle. In the case where the lessor is responsible for the repair and maintenance of the leased or rented vehicle (full maintenance lease) the lessor does not pay the revenue tax (PST) to the firm or person (vendor) carrying out the repairs. The lessor provides the vendor with his vendor account number and class code number and purchases the repairs exempt of tax. The revenue tax (PST) is collected from the lessee as part of the monthly lease or rental payment. If the lessee is responsible for the repair and maintenance of the leased or rented vehicle revenue tax (PST) must be charged on each invoice, regardless of whether or not the cost of the repairs are paid from insurance proceeds. This guide is provided for information purposes only and should not be considered a substitute for the legislation. If there is any conflict between the information in this guide and the statutes, the statutes shall prevail. Any questions concerning the contents of this Revenue Tax Guide should be directed to:






Fax: (902) 368-6164

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RTG: 144 March 1996

TAX APPLICATION ON INTERNET SERVICES The Prince Edward Island Revenue Tax Act, R.S.P.E.I. 1988, Cap. R-14 provides for the taxing of telecommunication services which includes Internet services. Internet service providers are required to register as vendors with the Taxation and Property Records Division of the Department of The Provincial Treasury and collect and remit provincial revenue tax (PST) on the charges they bill to their customers. Generally, the Internet provides customers with access to a number of services such as the ability to send and receive e-mail. The services provided by Internet are usually bundled into packages with a single charge billed to the customer. Provincial revenue tax (PST) is applicable to the full purchase price paid by customers for Internet access. The full purchase price includes sign-up or registration fees and all access charges such as flat-rate monthly fees or time-usage fees. Internet service providers may purchase Internet services for resale exempt of revenue tax (PST) by providing their supplier with their vendor account number and class code number. Equipment and services purchased by the Internet service provider for own use and/or consumption are taxable to the service provider. This guide is for reference only. If there is any conflict between the information contained in this guide and the statutes, the statutes shall prevail. Further information may be obtained by contacting:






Fax: (902) 368-6164

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RTG: 145 March 1997 (Revised August 2003)

TAX EXEMPT GOODS FOR AQUACULTURISTS The following goods may be purchased by an aquaculturist, in possession of a valid Revenue Tax Exemption Permit, exempt of revenue tax (PST) when purchased for the practice of aquaculture and for no other commercial purpose.

-A- -Aerators -Alarms and monitoring equipment -Anaesthetics, antibiotics, disinfectants, medicaments, pharmaceuticals and vaccines for aquatic species -Anchors for mooring of boats, cages and lines -Anti-fouling compound -Aprons -Augers for harvesting through ice -Axes for harvesting through ice

-B- -Baler twine (to reinforce mussel socks) -Barometers -Batteries for boats -Bilge pumps -Binnacles -Boat bailers -Boats (fishing), dinghies, dories, skiffs and scows -Bungie cord -Buoys, floats and markers

-C- -Cables -Cages and tanks -Cement troughs for dipping oyster collectors -Chain saws (minimum 70cc with 2 foot bar) -Chains -Charts, tide and navigation -Cleaning tools including brushes, mops and brooms -Clocks for boats

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-Collector supports, including stands, flotation devices and long lines -Connectors -Conveyors -Counters, tallying -Crates, scale baskets and stowage and storage boxes

-D- -Depth sounders -Dimmers to control lighting -Dipnets -Dissolved oxygen meters

-E- -Electric light bulbs for use on boats (6, 12 and 32 volts) -Electric motors for operating pumps and equipment -Engines for boats -Escalators

-F- -Fan belts designed for machinery and equipment used by aquaculturists -Fans for hatchery ventilation -Feed storage boxes and bins -Feeders -Fenders -Fish eggs -Fish feed -Fish feed additives -Fish feed mixers and grinders -Fish grading equipment -Fish tags and tagging devices -Fishing nets and netting -Floats for nets -Fog horns and bells -Freezers for quick freezing, except cold storage units

-G- -Gaffs -Gas tanks for boats -Gear boxes for operating pumps and equipment -Generators, auxiliary -GPS equipment

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-H- -Hatch covers -Heaters (salamander) -Hoists for feed and fish handling -Hydraulic pumps, motors, fittings, hoses, and valves -Hydraulic steerers and auto pilots -Hydrometers, PH meters, temperature and salinity metres and thermometers

-I- -Ice-making machines -Incubators

-K- -Knives, splitting, skinning, filleting, gutting, and shucking and other such equipment

-L- -Lamps for use on boats -Lifting devices -Lime (bluestone) used to kill starfish -Live fish -Live spat -Loose hook blocks

-M- -Marine paint -Marine refrigerators -Marine stoves and furnaces -Marine toilets and sinks -Measuring boards -Medicine for aquatic species -Mending twine for nets -Microscopes and laboratory glassware -Motors, inboard and outboard for fishing boats -Mussel de-clumping, debasing, washing and grading equipment

-N- -Needles for netting -Netting for cages and pens

-O- -Oars

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-Oxygen generating equipment -Oyster harrows, rakes, scoops, scythes spreaders, threshers and tongs

-P- -Pails -Parts for any goods referred to in this section -Plastic locking zip ties -Plastic socks, mesh bags and Japanese lanterns -Pre-manufactured fish feeders -Pre-manufactured fish tanks having a minimum volume of one cubic metre -Preservatives for nets and lines -Propellers -Pumps for boats

-Q- -Quadrants

-R- -Radar equipment -Radio telephones for fishing boats -Refrigeration equipment for the preservation of fish food and fish before delivery to the buyer -Repair labour to service any goods referred to in this section -Resin and fibreglass matting -Rope -Row locks -Rubber clothing and footwear

-S- -Scoops -Seam paint and filler -Shackles -Shot, teleshot, scare cannons for scaring sea ducks -Shovels -Signal bells -Sinkers for mussel socks -Sleds used in harvesting aquaculture products -Smokers -Socking materials -Spat collectors and Chinese hats -Stainless steel hog rings -Starter’s pistols for scaring birds -Stocking-stuffer tables -Survival suits

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-T- -Tarpaulins -Temperature chart recorders -Timers to control lighting -Towing devices and hitches attached to exempt vehicles -Trailers and wagons used to transport aquacultural products or equipment to and from aquaculture beds or fish farms and not required to be licensed -Turnbuckles

-V- -Ventilating systems for processing plants and warehouses -Vexar material for oyster socking

-W- -Wash down pumps for boats -Water and soil analyzers -Water circulation systems including pumps, pipes, valves, filters and fittings -Water heaters -Water testing equipment -Water treatment chemicals -Weigh scales -Wet suits -Winches and pulleys not attached to vehicles required to be registered under the Highway Traffic Act -Wire cable The following goods may not be purchased exempt of revenue tax (PST). However, when purchased by an aquaculturist, in possession of a valid Revenue Tax Exemption Permit, in the practice of aquaculture and for no other commercial purpose, the tax paid may be refunded. -All-terrain vehicle (4x4 with a minimum 400cc engine displacement) -Fork lift -Front end loader -Snowblower or snowplow for attachment to exempt/refundable equipment -Tractor (compact utility class or higher) To qualify for the refund an aquaculturist must: 1. Apply in writing; 2. Attach original invoices, receipts and other documentation; 3. The goods must have been purchased within 4 years of the date of the application; 4. Evidence must be provided to satisfy the Minister that the goods were used

exclusively in the practice of aquaculture.

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Further Information For copies of the Revenue Tax Act and Regulation and any inquiries regarding this Revenue Tax Guide, please contact: Taxation and Property Records Division Department of the Provincial Treasury P. O. Box 1330 Charlottetown PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca This guide is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this guide and the statutes, the statutes shall prevail.




Fax: (902) 368-6164

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RTG: 146 March 1997 (Revised September 1999)

REFUNDABLE PURCHASES - SILVICULTURISTS Persons whose principal source of gross annual income is from silviculture may apply for a refund of provincial revenue tax (PST) paid on the purchase of the following goods: -alarm systems that monitor temperature and humidity levels where their use is required to prevent death or damage to seedlings, plants, trees or shrubs -altimeters used to measure tree heights -augers, posthole, tree -axes -baler machines and twine, trees -batteries specially designed for farm tractors, tree harvesters, skidders and similar wood harvesting equipment -bush saws -buckets, rubber, metal and plastic -buckets, blades and rear blades or front-end loaders designed and marketed specially for use on farm tractors -calcium chloride installed in farm tractor tires -calipers used to measure tree diameters -cans for maple syrup -cant hooks -carriers used within the confines of a greenhouse -chains, logging and boom -chains, tire for farm tractors -chain saws -climatometers -containers for use in processing, shipping or delivering maple products, plants, trees, and shrubs -control equipment and distribution pipes for CO2 fertilizer -cultivators -debarkers -delimbers -diameter tape used to measure tree diameters -disinfectants -draft horses -drainage tile for cultivated land drainage -dusters and sprayers -ear protectors, safety -evaporation pans -evaporators

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-extractors -face masks, safety -farm-type wheeled tractors with at least 25 horsepower -farm wagons -feedwater treatment equipment used in greenhouses -feller-bunchers -felling leavers -fencing and fence posts to protect seeds and seedlings -fencing tools -ferrules -fertilizer applicators and tanks -files for saw sharpening and related devices -filters, processing -fittings for wire rope and cable used in woods operations -fogging machines -forklift attachments designed and marketed specially for attachment to farm tractors -forwarders, wood, tree -gardening tools used in production of crops for re-sale -greenhouse pots and flats -grooming brushes -harness -harrows and tillers -harvesters, wood and tree -heating systems in greenhouses -hoes -horseshoes -humidifiers and dehumidifiers in greenhouses -humidistats in greenhouses -hydrometers -increment borers used to determine the age of trees -insecticides and concentrates -irrigation systems, including power units if they are an integral part of the pumps, tubing, sprinklers and fittings -labels for containers used in processing, shipping or delivering products -land packers -limbing tools -lime bulk boxes -lime spreaders -line rigging used in woods operations -liquid fertilizer diluters, injectors and valves -logging arches -mistblowers -moisture control equipment -mowing machines -mulch, plastic, fabric or organic -nozzles, hose -pails, metal, plastic or rubber -pails, sap

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-peavies, picartoons, pike hooks and poles -pesticides -plant growth regulants -planting tools and trays -plastic film with ultra violet barrier -plastic netting for baling trees -plastic tubing used in maple sugar production -plows, except those designed for bull-dozing or snow removal -porters, wood and tree -potting machines -power tappers -processors, wood and tree -protective clothing and devices used in the distribution of control chemicals -pruning and limbing tools -pulp hooks -rakes -repair labour (service) to any goods listed in this schedule -rock pickers -rotivators -saw sharpening devices -scaling equipment, including sticks, tapes and measuring devices -scarification and soil equipment for land preparation -scoots -scythes and blades for scythes -seeders and planters -shears -shovels -skidders -skidder cables and chokers -skidding cones -slashers -sleds and trailers used to move logs from stump to skidway in the woods -sockets for wire rope and cable used in woods operations -sod plows -soil pasteurizers -spiles -sprayers and spreaders -sprinkler systems for greenhouses -strainers for maple products -sulkies and other similar wood forwarding equipment -taps, sap -thermostats and temperature control panels for greenhouses -tillers, garden type -tire chains for off-road forestry harvesting equipment -tractors, wheeled farm-type with at least 25 horsepower -transplanting machines -tree farmers -tree harvesters

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-tree harvester and skidder attachment -ventilation equipment for greenhouses -water heaters, portable immersion -water warmers -waterers and automatic shut-offs -watering equipment for field irrigation -watering equipment and programmers used in greenhouses -weed burners -wheelbarrows -wheeled hoes -winching equipment -wire rope and cable used in woods operations -wood chippers -wood drying equipment -wood splitters -wrappers for seedlings and maple products -yankee yarders NOTE: There is no refund of revenue tax (PST) on transportation vehicles used to transport logs from the cutting area to a mill or other area. Silviculturists applying for a refund of tax paid on eligible purchases have five years from the date of purchase to file an application for a refund of revenue tax (PST). This guide is prepared for information purposes only. If there is any conflict between the information contained in this guide and the Statutes, the Statutes shall prevail. Further information may be obtained by contacting:






Fax: (902) 368-6164

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RTG: 148 November 1997

TELECOMMUNICATION SERVICES A new definition of telecommunication services under the Revenue Tax Act Regulations came into effect on Saturday, October 18, 1997. The new definition includes all forms and types of telecommunication services and provides for the service and the equipment required to deliver and receive the service subject to the Prince Edward Island revenue tax (PST). Provincial revenue tax (PST) of 10% is to be applied to the GST included charges for any transmission, emission, reception of signs, signals, writing, images, sound or intelligence of any nature by wire, fibre optic cable, radio, satellite or other electromagnetic or laser based system as well as telephone, cable television, telegraph and telex services. Providers of the above mentioned services are required to register as vendors with the Taxation and Property Records Division of the Department of the Provincial Treasury and to collect and remit the provincial revenue tax (PST) on the charges for the services billed to Prince Edward Island subscribers. Vendors who sell at retail the programming and the equipment designed to send and/or receive telecommunications services are required to collect and remit the provincial revenue tax (PST) on the GST included selling price of equipment such as satellite dishes, receivers, decoders, computers, modems, monitors, and the like. The information contained in this guide is intended for information purposes only and if there is any conflict between the information in this guide and the Revenue Tax Act and Regulations, the Act and Regulations shall prevail. Further information may be obtained by contacting:






Fax: (902) 368-6164

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RTG: 149 July 1998

PET GROOMING SERVICES On June 18, 1993, clause 12(1)(v.1) of the Revenue Tax Act which provided a general exemption from provincial revenue tax (PST) for pets and pet food, was repealed. From that day forward pets (dogs, cats, rabbits, goldfish, canaries, hamsters, budgies, tropical fish etc.) were considered to be taxable goods and the 10% provincial revenue tax (PST) was to be added to the GST included retail selling price of such pets at the time of sale. The services provided by pet groomers including clipping, cleaning and brushing of pets is a taxable service because it is performed on a taxable good. Clause 1(1)(r) of the Revenue Tax Act Regulations says that labour expended or used to adjust, apply, clean, install, maintain, remodel, rebuild, repair, recondition and service goods which are taxable under the Act is also taxable. Therefore, effective June 18, 1993, persons or businesses engaged in the grooming of pets for gain are required to register as vendors with the Taxation and Property Records Division and collect and remit provincial revenue tax (PST) on their pet grooming fees. This guide is prepared for information purposes only. If there is any conflict between this guide and the statutes, the statutes shall prevail. Further information may be obtained by contacting:






Fax: (902) 368-6164

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RTG: 150 June 1998

TAX INFORMATION FOR AUTOMOBILE DEALERS This Revenue Tax Guide is issued to make sure the taxing provisions of the Prince Edward Island Revenue Tax Act R.S.P.E.I. 1988, Cap. R-14 are properly applied to the sale or lease of automobiles in Prince Edward Island 1. TAX ON TRADE-INS

When a customer is purchasing a vehicle and offers his or her vehicle as a part of the payment negotiated for the new vehicle, Prince Edward Island revenue tax (PST) applies on the difference in value of the two vehicles. In other words, if a customer is purchasing a $20,000 vehicle and the negotiated value of his or her vehicle for trade is $10,000, the revenue tax (PST) is applied to the $10,000 difference the customer pays to the dealer for the new vehicle. In order for a customer to obtain a trade value, he or she must be in possession of taxable goods to trade for taxable goods. Under the Revenue Tax Act THERE IS NO SUCH THING AS A TAX CREDIT AGAINST POSSIBLE FUTURE SALES. Tax is due and payable on the difference in value at the time of the sale.

2. LEASE WITH A TRADE-IN

When a customer wishes to lease a vehicle and offers his or her vehicle as a trade-in, there are two types of situations that could arise. (a) the vehicle to be traded is owned outright by the customer and has no liens against it and (b) the vehicle to be traded does have a lien against it.

(a) When the car owned by the customer to be traded on a leased vehicle has no lien against it, the negotiated value of the vehicle can be applied against the lease agreement to reduce the monthly lease payments. Revenue tax (PST) is then due on each of these monthly payments for the term of the lease.

(b) When the car owned by the customer that is to be traded has a lien against it, the dealer will first satisfy the lien by issuing a cheque in the name of both the customer and the lien holder. Then the negotiated value of the vehicle may be applied to the lease thus reducing the monthly lease payments, the same as above and the revenue tax (PST) would apply to each of the lease payments. The amount required to satisfy the initial lien is then treated as a loan that would require separate payments from the lease payments.

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3. CASH PAYMENTS BY DEALERS

Should a dealer and a customer agree on a value for a vehicle owned by the customer and the dealer provides a cash payment to the customer, that completes a purchase and sale transaction. The dealer has purchased the customers vehicle for resale and the customer no longer has any legal title to the vehicle and therefore has no trade-in with which to purchase or lease a new vehicle.

If the customer should then wish to purchase or lease a vehicle, revenue tax (PST) would apply to the full value of the purchase price or lease payments of the new vehicle.

The information contained in this guide is for reference only. Should there be any conflict between this guide and the statutes, the statutes shall prevail. If there are any questions please contact:






Fax: (902) 368-6164

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RTG: 151 August 1998

ADMINISTRATION FEES ON DELAYED PAYMENT SALES Many furniture and appliance stores offer goods for sale on the basis of no-down payment, no interest and no payments for a delayed period of time such as six months or a year. Most retailers offering this type of sale charge the customer an administration fee to complete the credit sale and this fee becomes part of the price of the goods. Administration fees charged on delayed payment sales contracts to customers of furniture and appliance stores are subject to provincial revenue tax (PST). The administration fee forms part of the fair value or selling price of the taxable goods. Section 4 of the Revenue Tax Act says that consumers (purchasers) of taxable goods consumed in the province must pay tax at the rate of 10% of the fair value of the goods. Therefore the fair value of goods sold under a delayed payment or a charge contract would be the retail price of the goods plus any administration fees plus the federal goods and services tax (GST). Effective September 1, 1998, furniture and appliance dealers in Prince Edward Island offering delayed payment sales contracts and charging an administration fee will be required to apply the provincial revenue tax (PST) to the selling price of the goods plus the administration fee. Should there be any conflict between the information contained in this guide and the statutes, the statutes shall prevail. Further information may be obtained by contacting:






Fax: (902) 368-6164

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RTG: 152 July 2000

MOTOR VEHICLE REPAIRS All repairs to motor vehicles (cars and trucks) in Prince Edward Island are subject to provincial revenue tax (PST) on the GST included cost of both parts and labour. New and used motor vehicle dealers having repairs carried out on vehicles held in inventory may purchase those repairs exempt of revenue tax (PST) by providing the repair shop with the dealer’s vendor registration account number and primary class code. The applicable tax will be collected by the dealer from the purchaser of the vehicle at the time of sale. Repairs carried out after the vehicle is sold by the dealer to a purchaser, are taxable and the tax must be paid by the purchaser. If the dealer from whom the vehicle was purchased agrees to pay the cost of the repairs, similar to a warranty agreement, then the dealer paying for the repairs is responsible for paying the tax on the GST included cost of the repairs. Motor vehicle repair shops may provide tax exempt repairs to motor vehicle dealers only in cases where the vehicle being repaired is part of the inventory of the dealer. All other repairs are subject to revenue tax (PST) and the tax must be paid by the person or business paying for such repairs. Should there be any conflict between the information contained in this guide and the statutes, the statutes shall prevail. Any questions concerning the proper application of the provincial revenue (sales) tax or PST should be addressed to:






Fax: (902) 368-6164

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RTG: 153 August 2000 (Revised January 2005)

REVENUE TAX EXEMPTIONS TO MANUFACTURERS/PRODUCERS Subsection 12(1) of the Prince Edward Island Revenue Tax Act allows manufacturers and producers to purchase certain goods, used directly in the manufacture or production of goods for sale, exempt of provincial revenue tax (PST). Subsection 12(1) provides an exemption from tax on the purchase of certain: • machinery, apparatus and complete parts therefore used directly in the manufacture or

production of goods for sale, but excluding storage and conditioning facilities; • machinery and apparatus purchased by manufacturers or producers for use by them in the

control of pollution to water, soil or air, attributable to the manufacture or production of goods; • goods purchased for the purpose of being processed, fabricated or manufactured into, attached

to or incorporated into goods for the purpose of sale; and • materials consumed or expended in the manufacture or production of goods for sale. Recent discussions between industry representatives and the Taxation and Property Records Division have resulted in an expansion of the list of goods that may be purchased exempt of revenue tax (PST) by manufacturers and producers. Effective January 1, 1999, the list of exempt goods has been expanded to include: • lighting and climate control equipment in the production area; • stools, cabinets and benches along the production line; • cleaning products for the production line area (to clean production equipment as well as the

floors and walls in the production area); • maintenance tools and consumables required to maintain and repair production equipment; • equipment (shelves, racks, etc.) and consumables in the packaging storage area; • shelving and other equipment used in a raw materials storage area located on the

manufacturing premises;

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• shelving and other equipment located in the first finished goods storage area; and • equipment and furnishings located in quality control labs.1 1 NOTE: This exemption is confined to quality control labs only. There is no exemption for research and development labs. Manufacturers and producers may apply for a refund of provincial revenue tax (PST) paid on any of the above-mentioned goods purchased since January 1, 1999. An application form “Request for Refund of Revenue Tax (PST)” must be completed and submitted, along with the appropriate receipts, to Taxation and Property Records Division P.O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca Applications for refund may also be dropped off at any Access P.E.I. location. Refund applications must be submitted within four years of the date of payment of the revenue tax (PST) for which a refund is sought. Inquiries concerning the information contained in this guide should be referred to the above address. This guide is prepared and issued for information purposes only, and should not be considered a substitute for the applicable legislation. Should there be any conflict between the contents of this guide and the statutes, the statutes shall prevail.






Fax: (902) 368-6164

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RTG: 154 June 2001

PRORATE TAX GUIDE INFORMATION FOR INTERJURISDICTIONAL MOTOR CARRIERS

This guide provides information to motor carriers on how the prorate tax applies to interjurisdictional vehicles. As part of Prince Edward Island’s entry into the International Registration Plan (IRP) on April l, 2001, the method of applying revenue tax (PST) on vehicles used for an interjurisdictional commercial purpose is being replaced by a prorate tax that is calculated and payable annually at a diminishing rate. Information on IRP registration or licensing requirements may be obtained from the Highway Safety Operations IRP Office, also known as the prorate office, as noted in Section 1 of this guide. Section 1 - International Registration Plan (IRP) What is IRP? • IRP is an interjurisdictional licensing agreement that establishes a single uniform system for

administering and collecting license fees and other recurring fees and taxes from persons operating interjurisdictional vehicles in Canada and the USA for the commercial carriage of passengers or goods.

• Under IRP, interjurisdictional carriers register or license their interjurisdictional vehicles with

their base jurisdiction only. The base jurisdiction assigns a carrier account number and issues one cab card and a base plate(s) for each of the carrier's vehicles. The base jurisdiction also collects all applicable licensing fees and taxes from the carriers on behalf of the other member jurisdictions, and distributes the amounts collected to the applicable jurisdictions. The base plate(s) and cab card allow the carrier to operate in the jurisdictions that are listed on the cab card.

IRP registration for Prince Edward Island based carriers • Prince Edward Island based carriers register under IRP through the Prince Edward Island IRP

Office at: Highway Safety Operations Telephone: (902) 368-5201 or 5202 IRP Office Fax: (902) 368-6269 33 Riverside Drive P.O. Box 2000 Charlottetown, PE C1A 7N8

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Section 2 - Prorate Tax on Interjurisdictional Vehicles General information • In this guide “prorate tax” refers to the prorated Prince Edward Island revenue tax (PST)

payable on interjurisdictional vehicles operating both in Prince Edward Island and in another jurisdiction. The general application of the prorate tax is as follows:

- Applies to the vehicle purchase price before trade-in allowance. - On leases, applies to the greater of the vehicle purchase price or its fair value. - Recurring tax calculated annually on proportional distances traveled in each

jurisdiction in the previous calculation year (July 1 to June 30). - Factored tax rate diminishes annually, due to a depreciation factor. - Trailers used for an interjurisdictional commercial purpose may be purchased or

leased exempt of revenue tax (PST) (i.e. the cost of trailers is factored into the applicable truck prorate tax rates listed in the “Rate of Prorate Tax” portion of this section).

- Repair parts and labour for interjurisdictional vehicles, and for trailers used for an interjurisdictional commercial purpose, may be purchased exempt of revenue tax (PST) (i.e. these costs are factored into the applicable truck and bus prorate tax rates listed later in the “Rate of Prorate Tax” portion of this section).

Carrier account number • The "carrier account number" is assigned to the carrier by the base jurisdiction and appears on

the cab card. It refers to the carrier's base jurisdiction abbreviation (2 letters), carrier number (5 digits), fleet number (2 digits) and fleet year (2 digits). An example of a carrier account number for Prince Edward Island is: PE 12345 - 01 - 02. While other jurisdictions may use a different term for the account number, they all have a similar numbering system. On Prince Edward Island, the carrier account number is assigned to the carrier by the prorate office at Highway Safety Operations.

Vehicles subject to the prorate tax • The prorate tax is imposed on vehicles that are licensed in Prince Edward Island for an

interjurisdictional commercial purpose, or that are licensed in another jurisdiction for an interjurisdictional commercial purpose and that travel on Prince Edward Island highways.

• "Interjurisdictional commercial purpose" means engaging in interprovincial or international trade

by way of the commercial carriage of passengers or goods. Please note: The definition of vehicle for prorate tax purposes does not include a trailer.

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Vehicles not subject to the prorate tax • Vehicles that operate solely in Prince Edward Island are not subject to the prorate tax. These

vehicles, their trailers and their respective repair parts and labour continue to be fully taxable in Prince Edward Island at 10% of the purchase price or lease amount.

Liability for prorate tax • The liability for prorate tax is shared jointly and severally between the person licensing the

interjurisdictional vehicle and any other person who has management of, or the right to determine the use of, the interjurisdictional vehicle while it is in Prince Edward Island during the vehicle license period.

Calculating the prorate tax • The Prince Edward Island prorate tax is calculated according to the following formula: Prorate tax = TV x R x DR x T Where TV = the vehicle taxable value of the interjurisdictional vehicle; R = the rate of prorate tax for the applicable calendar year;

DR = the distance ratio for the interjurisdictional vehicle for the vehicle license period;

T = the number of whole or partial calendar months in the vehicle license period at the time that the interjurisdictional vehicle is licensed, divided by 12.

Vehicle taxable value (TV) • If the interjurisdictional vehicle is purchased, the vehicle taxable value is the greater of:

(a) the purchase price paid by the carrier in the year of acquisition, before any trade-in allowance and excluding any GST paid; and

(b) the fair value of the interjurisdictional vehicle in the year of acquisition. • If the interjurisdictional vehicle is leased, the vehicle taxable value is the greater of:

(a) the purchase price of the interjurisdictional vehicle, as described in the lease agreement, in the year of acquisition, before any trade-in allowance and excluding any GST paid; and

(b) the fair value of the interjurisdictional vehicle at the start of the lease. • The vehicle taxable value of the interjurisdictional vehicle also includes any capital additions

made to the vehicle after the vehicle's acquisition date. For further information see "Capital Additions" in Section 7 of this guide.

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• The cost of an optional or extended warranty or maintenance contract is not included in the

vehicle taxable value if it is charged in addition to the interjurisdictional vehicle purchase price or lease amount.

Rate of prorate tax (R) • The rate of prorate tax is based on the number of calendar years since the current licensee

acquired the interjurisdictional vehicle. The prescribed rates of prorate tax to be used in each calendar year in which prorate tax is payable are as follows:

Calendar Year Prorate Tax rate

For Vehicle Other Than a Bus

Prorate Tax Rate For a Bus

The acquisition year 5.034% 3.148% First year following the acquisition year 4.045% 2.529% Second year following the acquisition year 3.328% 2.079% Third year following the acquisition year 2.809% 1.757% Fourth year following the acquisition year 2.441% 1.525% Fifth year following the acquisition year 2.411% 1.507% Sixth year following the acquisition year 2.306% 1.441% Seventh year following the acquisition year 2.272% 1.420% Eighth year following the acquisition year 2.288% 1.430% Ninth and subsequent years following the acquisition year 2.343% 1.464%

Distance ratio (DR) • The distance ratio (DR) for each jurisdiction is based on the distance travelled by a fleet in the

calculation year (defined as the period from July 1 to June 30) preceding the start of the current vehicle license period.

• The distance ratio (DR) for Prince Edward Island is the distance travelled in Prince Edward

Island by the fleet in which the vehicle is registered, in the calculation year immediately preceding the current vehicle license period, divided by the total distance travelled by that fleet in the calculation year. The calculation is the same whether the fleet consists of one vehicle or several vehicles.

• Where the actual distances traveled are not known (e.g. first-time licensee or a fleet that has

been licensed for less than 90 days in the calculation year immediately preceding the current vehicle license period), reasonable estimated distances may be used. However, if in the Minister’s opinion, using actual distances traveled in the fleet year would result in a significantly different distance ratio, the total prorate tax payable may be adjusted during an audit of the carrier.

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Section 3 - Registration Under IRP for Prince Edward Island Based Carriers Initial registration • When Prince Edward Island based carriers apply for registration under IRP, they must provide

travel distance information for each jurisdiction in which they travel and a copy of the bill of sale or the lease agreement for each vehicle licensed for interjurisdictional travel. This information is required to establish the distance ratio (DR) and the vehicle taxable value (TV) to be used in the formula to calculate the prorate tax payable as described in Section 2 of this guide.

• When the application for registration is processed, the Prince Edward Island prorate office will

calculate the fees and taxes payable to every jurisdiction in which the carrier travels and will issue an invoice to the carrier. The fees and taxes collected by the Prince Edward Island prorate office will be distributed to Prince Edward Island and to the other jurisdictions as is appropriate.

• Carriers base plated in Prince Edward Island should make their cheques payable to the

Provincial Treasurer of PEI and send them to the Prince Edward Island prorate office, along with a copy of the invoice summary. Carriers are required to remit US currency for fees and taxes calculated on behalf of US jurisdictions and Canadian currency for fees and taxes payable to Canadian jurisdictions.

• Please Note: Carriers who register under IRP in another jurisdiction are required to remit the

applicable fees and taxes on interjurisdictional vehicles to that base jurisdiction. The applicable fees and taxes are collected by that jurisdiction on behalf of all the IRP members (including Prince Edward Island), and will be appropriately distributed to each jurisdiction in which the carrier operates.

Annual renewals • Approximately 30 days before the expiry of registrations, Prince Edward Island carriers will

receive their prorate fleet distance and vehicle application forms for the next year, along with a letter detailing the reporting period for which mileage is requested. Upon completion, these forms can be mailed or faxed to the prorate office.

• After the renewal application is processed, the prorate office will make the appropriate

calculations for the annual fees and taxes due for the next year and issue an invoice to the carrier. The process for collection and payment of the fees and taxes payable for the renewal registration is the same as for the initial registration.

Do carriers need to be registered under the Revenue Tax Act? • Carriers are required to be registered for revenue tax (PST) purposes only if they sell taxable

goods in Prince Edward Island, or if they bring into or receive in Prince Edward Island taxable goods for their own use on which they have not paid Prince Edward Island revenue tax (PST). Carriers registered as vendors for revenue tax (PST) purposes will receive a supply of monthly tax returns which are used to remit the tax they collect on sales of taxable goods, and the tax they are required to pay on goods acquired for own use. Carriers registered as consumers for

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revenue tax (PST) purposes must report purchases of taxable goods on which revenue tax (PST) was not paid, and remit the tax immediately upon receipt of the goods in this province. Section 4 - Transitional "Tax Free" Period Vehicles previously licensed under ISTA or CAVR • Carriers who license interjurisdictional vehicles under IRP, that were acquired before April 1,

2001 and on which the Prince Edward Island revenue tax (PST) was previously paid, are eligible for a transitional exemption from or refund of the Prince Edward Island prorate tax for a period of up to two years. The transitional exemption period starts April 1, 2001 and ends March 31, 2003. When renewing the registrations for these interjurisdictional vehicles after March 31, 2003, the carrier will be required to pay the prorate tax at the rate corresponding to the number of years since the vehicle’s acquisition as shown in the table in Section 2 of this guide.

• This "tax free" transitional provision is intended to avoid double taxation on vehicles being

registered for an interjurisdictional commercial purpose under IRP that were previously registered for use in Prince Edward Island (including vehicles previously registered under ISTA/CAVR).

Eligibility for exemption or refund • To be eligible for the exemption or refund, the following criteria must be met: - All applicable revenue tax (PST) must have been paid to Prince Edward Island on the

purchase of the interjurisdictional vehicle, or on bringing or sending the vehicle into the province (includes revenue tax (PST) paid under ISTA);

- The interjurisdictional vehicle is being licensed or renewed under IRP for an

interjurisdictional commercial purpose; and - The interjurisdictional vehicle ownership does not change during the transitional

period. Obtaining the exemption or refund • Prince Edward Island based carriers whose interjurisdictional vehicles meet all the above

criteria, and are licensed through the Prince Edward Island prorate office during the two-year "tax-free" period, will automatically get a Prince Edward Island prorate tax exemption at the time of licensing or renewal.

• Carriers whose interjurisdictional vehicles are licensed in another base jurisdiction may receive

an exemption of Prince Edward Island prorate tax from their base jurisdiction. If their base jurisdiction does not allow the exemption, the carrier must pay the Prince Edward Island prorate tax at the time of licensing or renewal to that jurisdiction. The carrier may then apply for the applicable prorate tax refund, within four years of payment of the tax, to Taxation and Property Records Division at the address shown on the last page of this guide. The refund request must

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include a copy of the invoice showing payment of the Prince Edward Island prorate tax to the other jurisdiction, a copy of the vehicle's cab card, and documentation showing payment of Prince Edward Island revenue tax (PST) prior to April 1, 2001. The total amount of all transitional refunds or credits provided for an interjurisdictional vehicle licensed in a base jurisdiction other than Prince Edward Island shall not exceed the amount of revenue tax (PST) paid to Prince Edward Island on the vehicle prior to April 1, 2001. Leased vehicles are not eligible for the exemption • The exemption or refund under the transitional provision does not apply to leased vehicles.

Lease payments on vehicles apply only to the period of use. Therefore duplication of tax on leased interjurisdictional vehicles in the transitional period is not an issue.

Section 5 - Vehicle Transfers During a Vehicle License Period Vehicle transfers between two prorate fleets • Where an interjurisdictional vehicle is moved from one prorate fleet to another prorate fleet

during a fleet year, the vehicle may be eligible for a refund or credit of the prorate tax paid while part of the old fleet, for the number of whole calendar months left in the old fleet’s fleet year.

• To be eligible for the refund or credit, the interjurisdictional vehicle must be moved to a fleet

that operates partly in Prince Edward Island and the applicable prorate tax for the vehicle must have been paid under the new fleet.

• If the base jurisdiction (including Prince Edward Island) does not allow a credit, the licensee

must apply to Taxation and Property Records Division for a refund. The refund application must provide documentation showing the amount of prorate tax paid for the current fleet year to Prince Edward Island on the interjurisdictional vehicle in the old fleet, along with the amount of prorate tax paid on that vehicle to Prince Edward Island under the new fleet.

Vehicle transfers from interjurisdictional use to intrajurisdictional use • Where an interjurisdictional vehicle, or a trailer used for an interjurisdictional commercial

purpose, is transferred from an interjurisdictional operation to operate solely in Prince Edward Island, the licensee is, at that time, required to pay 10% revenue tax (PST) on the fair value of the vehicle or trailer. It is the responsibility of the carrier to ensure that the applicable tax is paid on the truck and trailer at the time of transfer.

• If an interjurisdictional vehicle is transferred during a vehicle license period, the licensee may

be eligible for a refund of the Prince Edward Island prorate tax paid, for the number of whole calendar months remaining in the old vehicle license period. The refund will be available on application to Taxation and Property Records Division. The amount of the refund will not exceed the 10% revenue tax (PST) paid on the fair value of the vehicle at the time of transfer to operate solely in Prince Edward Island.

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• When an interjurisdictional vehicle that was previously licensed in another jurisdiction is

transferred for use solely outside Prince Edward Island, the licensee is not eligible for a refund of the Prince Edward Island prorate tax paid on the interjurisdictional vehicle.

Vehicles purchased after April l, 2001 and transferred from intrajurisdictional to interjurisdictional use • A vehicle that is purchased on or after April 1, 2001, for use solely in Prince Edward Island, is

subject to the 10% revenue tax (PST). Where a person subsequently licenses that vehicle under IRP for an interjurisdictional commercial purpose, the person must also pay the prorate tax. However, a refund for a portion of the prorate tax payable to Prince Edward Island may be available to a person licensing this interjurisdictional vehicle in the province under IRP for any period that is within five years after the acquisition date of the vehicle.

• The applicable Prince Edward Island prorate tax refund will be available on application to

Taxation and Property Records Division. Section 6 - Purchase and Lease of Vehicles and Trailers How to obtain the revenue tax (PST) exemption on vehicle or trailer purchases and leases • Carriers may purchase or lease (including short term rentals) vehicles and trailers used for an

interjurisdictional commercial purpose, including optional or extended warranties and maintenance contracts, without paying tax at the time of purchase or lease by quoting their carrier account number to the vendor or lessor. The vendor or lessor may also request proof of registration under IRP, such as an original cab card. The vendor or lessor must record the carrier account number and the purchaser’s or lessee’s name on the sales invoice or lease contract, and retain a copy of the document to substantiate the tax exemption.

• Please note: Revenue tax (PST) applies to the full purchase price or lease payments for

vehicles and trailers that are acquired or transferred for use solely within Prince Edward Island.

Unlicensed carriers must pay revenue tax (PST) • Carriers who are not yet licensed under IRP, and owner-operators who are not currently under

contract with a carrier licensed under IRP, must pay 10% revenue tax (PST) on their purchases or lease of trucks, trailers and buses.

• Where the carrier will, within 30 days of the purchase or lease date, be licensing the vehicle for

an interjurisdictional commercial purpose, the carrier may apply to Taxation and Property Records Division at the address noted on the last page of this guide for a letter authorizing the vendor to sell the motor vehicle (but not trailers) to the carrier without collecting the revenue tax (PST).

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Responsibility to ensure proper application of revenue tax (PST) • Both the vendor and the purchaser share the responsibility to ensure that goods sold without

revenue tax (PST) are eligible for an exemption. • It is the vendor's responsibility to ensure that the individual or firm has a valid carrier account

number and is purchasing goods of a type normally used for an interjurisdictional commercial purpose. In this respect, the vendor may request that the purchaser present proof of registration under IRP, e.g. a cab card. The vendor must record the carrier account number on the sales invoice.

• It is the purchaser's responsibility to quote his or her carrier account number to the vendor only

when purchasing goods tax exempt for eligible purposes, i.e. for interjurisdictional vehicles or trailers used with interjurisdictional vehicles. When vehicles and trailers are acquired for tax exempt interjurisdictional commercial purpose, and subsequently cease to be used for an interjurisdictional commercial purpose, the purchaser is responsible to ensure that the applicable revenue tax (PST) on the fair value of these goods is self-assessed and remitted to the Minister.

Trailers used both interjurisdictionally and intrajurisdictionally • When the carrier is unable to designate specific trailers that are used solely for an

interjurisdictional commercial purpose and those that are used solely within Prince Edward Island, a reasonable allocation will have to be made to determine the trailers that are subject to revenue tax (PST). For example, if 70% of a carrier's power units (including owner-operator units) are licensed for an interjurisdictional commercial purpose, and 30% of its power units are licensed solely for in-province use, then 30% of the amount paid to purchase or lease trailers during that year would be subject to 10% revenue tax (PST). If sufficient tax has not been paid to the vendor or lessor during the year, the carrier must calculate and remit the applicable revenue tax (PST) to the Minister. The method of allocation is subject to audit.

Section 7 - Repairs to Interjurisdictional Vehicles and Trailers Purchasing parts and labour tax exempt • Replacement parts for interjurisdictional vehicles and trailers used for an interjurisdictional

commercial purpose may be purchased revenue tax (PST) exempt. To obtain the exemption on replacement parts, carriers must quote their carrier account number to the vendor at the time of purchase. The vendor must record the carrier account number on the invoice and retain a copy. Only replacement parts that are specifically designed and manufactured for that type of interjurisdictional vehicle or trailer are exempt. General purpose parts and repair materials as discussed under "Shop supplies" in this section are taxable.

• Repair parts and labour for interjurisdictional vehicles and trailers used for an interjurisdictional

commercial purpose may be purchased revenue tax (PST) exempt. To obtain the exemption on repair parts and labour, carriers must quote their carrier account number and provide a copy of the cab card for the interjurisdictional vehicle being repaired, to the vendor at the time of purchase. The vendor must record the carrier account number on the work order and retain a

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copy of the work order. A copy of the cab card must also be attached to the vendor's work order to substantiate the tax exemption allowed. • Please Note: Replacement parts and repair parts and labour for vehicles and trailers used

solely in Prince Edward Island are subject to revenue tax (PST) on the total purchase price. Separate inventory for tax exempt replacement parts • Carriers should maintain an inventory of replacement parts purchased tax exempt for

interjurisdictional vehicles and trailers, separate from their inventory of tax-paid parts for vehicles and trailers used solely in Prince Edward Island.

• If the carrier does not pay revenue tax (PST) to the vendor upon the purchase of parts for

vehicles and trailers used solely in Prince Edward Island, the carrier must self-assess the tax on these parts and remit it to the Minister monthly.

Purchases by owner-operator • An owner-operator who operates an interjurisdictional vehicle or trailer under contract to a

licensed carrier may also purchase replacement parts, repair parts and labour tax exempt. • To obtain the exemption on replacement parts, the owner-operator must quote the carrier’s

carrier account number to the vendor at the time of purchase. The vendor must record the carrier account number on the invoice and retain a copy.

• To obtain the exemption on repair parts and labour, the owner-operator must quote the carrier’s

carrier account number and provide a copy of the cab card for the interjurisdictional vehicle being repaired, to the vendor at the time of purchase. The vendor must record the carrier account number on the work order and retain a copy of the work order. A copy of the cab card must also be attached to the vendor's work order to substantiate the tax exemption allowed.


contract with a licensed carrier, must pay revenue tax (PST) on their purchases of replacement parts and repair parts and labour.

Taxable accessories • Accessories for interjurisdictional vehicles (including installation labour) purchased separately

from the vehicle are subject to 10% revenue tax (PST). The following are examples of some optional accessories that are taxable unless they are included in the purchase price of the vehicle:

-Bug deflectors and screens -First aid kits -Rotating lights -CB radios -Fridges -Seat covers -Enhanced sound systems -Microwaves -Telephones

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-Facsimile machines -Portable computers -Televisions -Fleet net radios including -Portable generators -VCRs the antenna -Portable positioning -Winter fronts systems Consumable supplies • When consumable supplies are purchased in Prince Edward Island, revenue tax (PST) is

payable on the full purchase price. Consumable supplies include: -Adhesive -Ether -Oil and fuel additives -Air conditioning fluids -Grease -Power steering fluids -Anticorrosion additives -Lubricants -Washer fluids -Antifreeze -Oils • If the consumables are supplied as part of a work order issued by a vendor for work done on an

interjurisdictional vehicle or trailer, they may be purchased tax exempt. • Prince Edward Island revenue tax (PST) does not apply when these supplies are purchased

and installed in the vehicle outside of Prince Edward Island, as the tax is usually payable to the jurisdiction where the supplies were purchased.

Shop supplies • Although parts that are specifically designed as replacement parts for interjurisdictional vehicles

and trailers qualify for an exemption, general purpose repair materials purchased by carriers are subject to revenue tax (PST).

• Revenue tax (PST) does not apply on general purpose materials that are included as part of a

work order issued by a vendor for work done on an interjurisdictional vehicle or trailer. • The following are examples of general purpose repair materials and shop supplies that are

taxable unless included as part of a work order issued by a vendor for work done on an interjurisdictional vehicle or trailer:

-Air hose -Exhaust tubing -Plastic ties and tubing -Cable -Fittings (universal) -Rope -Canvas -Heat shrink -Rubber tubing -Chain -Heater hose -Sheet metal -Cloth -Hose clamps -Vinyl -Copper tubing -Hydraulic hose -Wire loom -Electrical terminals -Iron and steel material -Wood -Electrical wire -Nuts and bolts

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Other taxable goods and services • The following are some examples of non-vehicle related goods and services purchased by

carriers for use in Prince Edward Island, that are always subject to revenue tax (PST):

- shop tools and equipment, warehouse equipment, office furniture and equipment, computer hardware and software, repair and maintenance contracts for goods.

Capital additions or modifications to interjurisdictional vehicles • The total cost of capital additions such as tanks, pickers, sleepers, pumping and handling

equipment or other equipment that is permanently mounted on the interjurisdictional vehicle (but not “Taxable accessories” mentioned earlier in this section) must be included in the vehicle taxable value on which the prorate tax is calculated. The cost of parts and labour to install the capital additions must also be included in the vehicle taxable value.

• The carrier does not pay revenue tax (PST) to the vendor on the purchase of capital additions

or on the cost of parts and labour to install them. Repair parts and labour to service the capital additions subsequent to installation may also be purchased tax exempt.

• It is the IRP licensee’s responsibility to advise the prorate office at the time of licensing an

interjurisdictional vehicle of any capital additions or modifications made to the vehicle after it was purchased or leased. Where the additions occur after it has been licensed, the licensee must advise the prorate office at the time of receiving the next license renewal forms.

Equipment mounted on or attached to a trailer used interjurisdictionally • Any equipment that is permanently mounted on or attached to a trailer used with an

interjurisdictional vehicle, and used or designed for a purpose other than the commercial carriage of goods or passengers, is subject to 10% revenue tax (PST).

Section 8 - Records and Audits What records must I keep? • Carriers who license vehicles under IRP must maintain records that substantiate the reported

distances traveled and the costs of all vehicles in the IRP fleets. Requirement to keep records • The Revenue Administration Act generally requires that records be retained until such time as

the Provincial Tax Commissioner may authorize their destruction. Requests for approval of destruction of records should be addressed to the Provincial Tax Commissioner at the address noted below.

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Taxation and Property Records Division audits • Taxation and Property Records Division conducts audits of carriers based in Prince Edward

Island on behalf of all IRP member jurisdictions. The purpose of the audit is to ensure compliance with the legislation governing prorated tax. The audits also ensure proper payment of prorated fees and taxes to Prince Edward Island and to all other IRP member jurisdictions in which the carrier is (or was) licensed for interjurisdictional travel.

• To minimize the inconvenience for motor carriers, audits of the following programs and tax

statutes may be conducted at the same time: - International Registration Plan (IRP) - International Fuel Tax Agreement (IFTA) - Prorate tax - Revenue tax (PST) Further Information For copies of the Revenue Tax Act and Regulations and any inquiries regarding this Revenue Tax Guide, please contact: Taxation and Property Records Division Department of the Provincial Treasury P.O. Box 1330 Charlottetown, PEI C1A 7N1 Telephone: (902) 368-4329 or (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca This guide is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this guide and the statutes, the statutes shall prevail.




Fax: (902) 368-6164

1

RTG: 155 June 2001

SALES TO INTERJURISDICTIONAL MOTOR CARRIERS Effective April 1, 2001 the method of applying revenue tax (PST) on vehicles used interjurisdictionally changed. This guide provides information to vendors who sell goods to motor carriers who operate interjurisdictional vehicles. (The Revenue Tax Act defines “goods” to include repair and installation labour). Section 1- General Information What is the change in the method of tax application? • As of April 1, 2001 carriers (trucks and buses) operating in Prince Edward Island and in one or

more other jurisdictions, could register under the International Registration Plan (IRP). Once registered, they no longer pay revenue tax (PST) at the time of purchase or lease on their interjurisdictional vehicles or trailers used for an interjurisdictional commercial purpose, nor on repair parts and labour purchased for these vehicles or trailers. Instead, the carriers will pay a prorate tax annually on their trucks and buses through the licensing authority.

• Prorate tax is the method being adopted by most taxing jurisdictions in Canada and the United

States to avoid double taxation on interjurisdictional vehicles. Under this method, carriers pay a proportional tax to each jurisdiction in which they travel.

How will vendors know that a carrier is licensed under IRP? • The Highway Safety Operations IRP office (prorate office) registers vehicles used for

interjurisdictional purposes under IRP. Each carrier registered under IRP will be assigned a carrier account number and issued a cab card for each interjurisdictional vehicle licensed under IRP. The cab card contains a description of the vehicle, the carrier's carrier account number, and each jurisdiction in which the carrier is authorized to travel. The cab card must be carried in the vehicle at all times, and presented to the vendor when requested.

What is a carrier account number? • The "carrier account number" is assigned to the carrier by the base jurisdiction and appears on

the cab card. It refers to the carrier's base jurisdiction abbreviation (2 letters), carrier number (5 digits), fleet number (2 digits) and fleet year (2 digits). An example of a carrier account number for Prince Edward Island is: PE 12345 - 01 - 02. While other jurisdictions may use a different term for the account number, they all have a similar numbering system. On Prince Edward Island, the carrier account number is assigned to the carrier by the prorate office at Highway Safety Operations.

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Section 2- Responsibility to Ensure Proper Application of PST • Both the vendor and the purchaser share the responsibility to ensure that goods sold without

revenue tax (PST) are eligible for an exemption. • It is the vendor's responsibility to ensure that: - the individual or firm is registered under IRP; - the vehicle, trailer or repair parts and labour is being purchased for

interjurisdictional commercial use; and - the goods being purchased are of a type normally used for an

interjurisdictional commercial purpose. • The vendor may request that the purchaser present a cab card as proof of registration under

IRP, and must record the carrier account number on the sales invoice or lease agreement. • It is the purchaser's responsibility to quote his or her carrier account number to the vendor only

when purchasing goods tax exempt for interjurisdictional vehicles or trailers used with interjurisdictional vehicles.

Section 3- Vehicle and Trailer Sales and Leases How do vendors allow the PST exemption on vehicles and trailers? • Carriers may purchase or lease vehicles and trailers (including optional or extended warranties

and maintenance contracts) used for an interjurisdictional commercial purpose without paying revenue tax (PST) at the time of purchase or on lease payments by quoting their carrier account number to the vendor or lessor. The vendor or lessor may also request proof of registration under IRP, such as a cab card. The vendor or lessor must record the purchaser’s carrier account number and name on the sales invoice or lease contract, and retain a copy of the document to substantiate the tax exemption.

• An owner-operator operating an interjurisdictional vehicle under contract to a carrier licensed

under IRP may quote the carrier’s carrier account number to purchase or lease that vehicle or trailer tax exempt.

• Please note: Vehicles and trailers that are purchased or leased and registered for use solely

within Prince Edward Island continue to be subject to the 10% revenue tax (PST). Vendors must collect the revenue tax (PST) on the full selling price at the time of sale or on the lease payments of such vehicles and trailers.

Vehicles leased before April 1, 2001 • Lease payments for interjurisdictional vehicles due on or after April 1, 2001 qualify for the

revenue tax (PST) exemption as discussed above. If the lease agreement was signed before April 1, 2001, the vendor must obtain the carrier's carrier account number and record it on the lease agreement before allowing the tax exemption on the remaining monthly payments.

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Unregistered carriers must pay revenue tax (PST) • Carriers who are not yet licensed under IRP (i.e. who do not have a carrier account number),

and owner-operators who are not currently under contract with a carrier licensed under IRP, must pay 10% revenue tax (PST) on their purchase or lease of trucks, trailers and buses.

• Where the carrier will, within 30 days of the purchase or lease date, be licensing the vehicle for

an interjurisdictional commercial purpose, the carrier may apply to Taxation and Property Records Division, at the address noted on the last page of this guide, for a letter authorizing the vendor to sell the motor vehicle (but not trailers) to the carrier without collecting the revenue tax (PST).

Section 4 - Repairs to Interjurisdictional Vehicles and Trailers How do vendors allow the PST exemption on parts and labour? • Carriers may purchase replacement parts and repair parts and labour for interjurisdictional

vehicles and trailers used for an interjurisdictional commercial purpose without paying revenue tax (PST).

• To obtain the exemption on replacement parts, carriers must quote their carrier account number

to the vendor at the time of purchase. The vendor must record the purchaser’s carrier account number and name on the invoice and retain a copy to substantiate the revenue tax (PST) exemption.

• Only replacement parts that are specifically designed and manufactured for that type of

interjurisdictional vehicle or trailer are exempt. General purpose parts and repair materials listed under “shop supplies” later in this guide are taxable.

• To obtain the exemption on repair parts and labour, carriers must quote their carrier account

number, and provide a copy of the cab card for the interjurisdictional vehicle being repaired, to the vendor at the time of purchase. The vendor must record the purchaser’s carrier account number and name on the work order and retain a copy of the work order. A copy of the cab card must also be attached to the vendor's work order to substantiate the tax exemption allowed.

• Please Note: Replacement parts and repair parts and labour for vehicles and trailers used

solely in Prince Edward Island are subject to revenue tax (PST) on the total purchase price. Sales to out of province interjurisdictional carriers • Where an out of province carrier requires repair work in Prince Edward Island on an

interjurisdictional vehicle, the vendor may allow the revenue tax (PST) exemption on the charges to the carrier. The vendor must retain a photocopy of the vehicle's cab card and ensure that Prince Edward Island (PE) is listed on the cab card as an authorized jurisdiction. Otherwise the vendor must collect the Prince Edward Island revenue tax (PST) on the total amount charged.

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Purchases by owner-operators • An owner-operator who operates an interjurisdictional vehicle or trailer under contract to a

carrier licensed under IRP may also purchase replacement parts and repair parts and labour tax exempt by quoting the carrier’s carrier account number to the vendor at the time of purchase. The responsibility to ensure proper application of revenue tax (PST), and the required documentation, are the same as for purchases by carriers licensed under IRP.


contract with a licensed carrier, must pay revenue tax (PST) on their purchases of replacement parts and repair parts and labour.

Taxable accessories • Accessories for interjurisdictional vehicles (including installation labour) purchased separately

from the vehicle are subject to 10% revenue tax (PST). The following are examples of some optional accessories that are taxable unless they are included in the purchase price of the vehicle:

-Bug deflectors and screens -First aid kits -Rotating lights -CB radios -Fridges -Seat covers -Enhanced sound systems -Microwaves -Telephones -Facsimile machines -Portable computers -Televisions -Fleet net radios including -Portable generators -VCRs the antenna -Portable positioning systems -Winter fronts Consumable supplies • When consumable supplies are purchased in Prince Edward Island, revenue tax (PST) is

payable on the full purchase price. If the consumables are supplied as part of a work order issued by a vendor for work done on an interjurisdictional vehicle or trailer, they may be purchased revenue tax (PST) exempt.

• Consumable supplies include: -Adhesives -Ether -Oil and fuel additives -Air conditioning fluids -Grease -Power steering fluids -Anticorrosion additives -Lubricants -Washer fluids -Antifreeze -Oils Shop supplies • Although parts that are specifically designed as replacement parts for interjurisdictional vehicles

and trailers qualify for an exemption, general purpose repair materials purchased by carriers are subject to tax.

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• Revenue tax (PST) does not apply on general purpose repair materials that are included as

part of a work order issued by a vendor for work done on an interjurisdictional vehicle or trailer. • The following are examples of materials and shop supplies that are taxable unless included as

part of a work order issued by a vendor for work done on an interjurisdictional vehicle or trailer: -Air hose -Exhaust tubing -Plastic ties and tubing -Cable -Fittings (universal) -Rope -Canvas -Heat shrink -Rubber tubing -Chain -Heater hose -Sheet metal -Cloth -Hose clamps -Vinyl -Copper tubing -Hydraulic hose -Wire loom -Electrical terminals -Iron and steel material -Wood -Electrical wire -Nuts and bolts Other taxable goods and services • The following are some examples of non-vehicle related goods and services purchased by

carriers for use in Prince Edward Island, that are always subject to revenue tax (PST): - shop tools and equipment, warehouse equipment, office furniture and equipment,

computer hardware and software, repair and maintenance contracts for goods. Capital additions or modifications to interjurisdictional vehicles • The carrier does not pay revenue tax (PST) to the vendor on the purchase of capital additions

such as tanks, pickers, sleepers, pumping and handling equipment or other equipment that is permanently mounted on the interjurisdictional vehicle, or on the cost of parts and labour to install or service them.

Equipment mounted on or attached to a trailer used interjurisdictionally • Any equipment that is permanently mounted on or attached to a trailer used with an

interjurisdictional vehicle, and used or designed for a purpose other than the commercial carriage of goods or passengers, is subject to 10% revenue tax (PST).

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Further Information For copies of the Revenue Tax Act and Regulations, RTG:154 - Prorate Tax Guide - Information for Interjurisdictional Motor Carriers, and any inquiries regarding this Revenue Tax Guide, please contact:


Website: www.taxandland.pe.ca This guide is prepared for information purposes only, and should not be considered a substitute for the statutes. Should there be any conflict between the contents of this guide and the statutes, the statutes shall prevail.






Fax: (902) 368-6164

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RTG: 156 March 2003

TAX EXEMPT PACKAGING MATERIALS Goods that form packaging of goods for resale are exempt from revenue tax (PST) pursuant to clause 12(1)(j) of the Prince Edward Island Revenue Tax Act. The following items may be purchased exempt of revenue tax (PST) by vendors in the food service industry (restaurants, fast food outlets, take out restaurants, canteens, etc.) if the purchaser has a valid vendor registration number and the appropriate business class code: Food packaging boxes (paper, plastic, Styrofoam) Straws Disposable cups (paper, plastic, Styrofoam) Stir sticks Disposable portion cups (paper, plastic, Styrofoam) Cocktail picks Disposable cutlery (knives, forks, spoons) Swizzle sticks Disposable plates and bowls (paper, plastic, Styrofoam) Paper napkins Food packaging bags (paper, plastic) Disposable trays Wrapping paper for packaging food (waxed, foil, etc.) Lids for disposable cups Paper place mats, paper table cloths and paper tray liners are not exempt and revenue tax (PST) must be paid on the purchase of these items. If you have any questions please contact: Taxation and Property Records Division Department of the Provincial Treasury P.O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca This guide is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this guide and the statutes, the statutes shall prevail.




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Fax: (902) 368-6164

RTG: 157 June 2003 (Revised December 2007)

FOOD AND BEVERAGES Food and beverages for human consumption, including sweetening agents, seasonings and other ingredients to be mixed with or used in the preparation of such food or beverages, are generally exempt from revenue tax (PST). TAXABLE GOODS: PST applies to the following goods:

wine, spirits, beer, malt liquor or other alcoholic beverages non-alcoholic malt beverages carbonated beverages candies, confectionery that may be classed as candy, or any goods sold as candies,

such as candy floss, chewing gum and chocolate, whether naturally or artificially sweetened, and including fruits, seeds, nuts and popcorn when they are coated or treated with candy, chocolate, honey, molasses, sugar, syrup or artificial sweeteners when purchased at a purchase price of fifty cents or more

prepared meals prepared food products (defined below) purchased from an eating establishment

(defined below) snack foods (refer to Revenue Tax Guide RTG:135 - Snack Foods)

Prepared food products Prepared food products are defined in the Revenue Tax Act as:

• food or beverages heated for consumption • non-carbonated, non-alcoholic beverages (milk, juice, etc.), when purchased with

other non-liquid prepared food products • carbonated beverages • salads, sandwiches, and similar products (wraps, donairs, etc.) • platters of cheese, cold cuts, seafood, baked goods, fruit or vegetables • baked goods or products, including pastries, muffins, tarts, cookies, doughnuts,

croissants, bagels and servings of pies or cakes, when purchased in quantities of five or fewer

for consumption on or off the premises where sold. Eating establishment The Revenue Tax Act also defines “eating establishment” as:

a restaurant, dining room, dairy bar, ice cream parlour or cafeteria including any such establishment providing take-out or counter service


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a lounge, coffee shop, pizzeria, lunch counter, mobile canteen, coffee wagon, or canteen

a vending machine when dispensing food a snack bar a stand or facility from which prepared food products are dispensed at an exhibition,

fair, sporting event, theatre, cinema, grocery store, convenience store or other store where food products are sold or on a water vessel

and includes any premises or location to which a caterer supplies prepared food products.

EXEMPT GOODS PST does not apply to prepared food products purchased or supplied/sold in the following circumstances:

• purchased by a school board that are to be supplied primarily to elementary or secondary school students

• supplied or sold by a school board primarily to elementary or secondary school students

• other than food supplied through a vending machine, purchases of food by elementary or secondary school students in a school cafeteria (however, the supply of prepared food products by a school cafeteria for a private party, reception, meeting or similar private event is subject to PST)

• purchased at a university or public college by a student through a meal plan under which the student purchases for a single price not less than ten (10) meals per week

• supplied or sold by a public sector body (such as a soup kitchen) for the purpose of relieving poverty, suffering or distress of individuals

• supplied or sold by a public sector body (such as Meals on Wheels) to aged, infirm, disabled or underprivileged individuals for consumption in their places of residence

• supplied or sold on an occasional basis (fund raising suppers) by a religious, charitable or benevolent organization, where the labour involved is all volunteer and without remuneration

FURTHER INFORMATION: For copies of the Revenue Tax Act and Regulations and any inquiries regarding this Revenue Tax Guide, please contact:






Fax: (902) 368-6164

1

RTG: 158 June 2003 (Revised December 2003, July 2006, January 2008)

SALES TAX INFORMATION FOR SERVICE STATIONS AND GARAGES INTRODUCTION This guide has been prepared to provide owners and operators of service stations, garages, auto body shops, auto dealerships and businesses of a similar nature with information regarding the application of the revenue tax (PST) in relation to the sale and repair of taxable goods as it applies to their type of business. RESPONSIBILITIES As a registered vendor, under the Prince Edward Island Revenue Tax Act you are required to charge and collect revenue tax (PST) on all taxable sales. Also, you are required to remit the tax collected and file vendor returns by the 20th day of the month following the end of your reporting period. These returns must contain information on sales made and revenue tax (PST) collected during the reporting period. The Department considers revenue tax (PST) to have been collected at the time of sale regardless of the method of payment for the sale. RECORDS All vendors are required to maintain proper accounting records providing information for tax inspection and audit purposes, including;

(a) Sales invoices, purchase invoices and cash register tapes. Invoices should include the purchaser’s name, date, description of the merchandise and the tax charged.

(b) Details of exempt sales, such as sales to other registered vendors, farmers, fishers and aquaculturists. Vendor Account, Business Class Codes or Revenue Tax Exemption Permit number must be recorded on all invoices on tax exempt sales.

(c) Records of revenue tax (PST) collected, including the vendor’s copy of vendor return forms, records of payments and the commission taken.

(d) A record of all goods taken from stock for own use. All records and documents must be retained until such time as the Provincial Tax Commissioner authorizes their destruction in writing.

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PARTS FOR RE-SALE The Vendor Account Number (six digits) and Business Class Code (four digits) allows you to purchase, revenue tax (PST) exempt, parts and materials which will be incorporated into or become affixed to your customer's vehicle; for example: spark plugs, batteries, body filler, patching supplies, welding rods, wheel weights, etc. You in turn must charge tax to your customers on the total job cost including both parts and labour. SUPPLIES FOR OWN USE In providing service to your customers, you must use certain materials and supplies that are consumed or used by you and do not become part of the vehicle being repaired. You are required to pay tax on all goods which you consume yourself. The following are examples of goods which are taxable under the Revenue Tax Act when sold to garages, service stations and similar businesses for use or consumption and not for resale. NOTE: This is not an exhaustive list and is intended as a guide only. Abrasives Grease Guns, Hose and Parts Anti-Freeze Testers Hoists Battery Chargers, Fillers, Hoses - Water, Air Brake Testers Hand Tools Bulbs - For Lighting Hacksaw Blades Cables - Booster, Towing Hydrometers Cans - Oil, Water and Paint Jack Oil Carborundum Jacks - Hydraulic, Bumper Car Seat Covers - Paper Lubrication Greases, Fittings Cash Registers Masking Tape, Duct Tape Chain Blocks and Chain Office Supplies Chamois Oil Dry and similar preparations Compressors Penetration Oil Computers Premiums Creepers and Casters Prestolite and similar refills Desks Protective Covers Electric Sanders, Drills Rags Hammers Sanding Discs Electric Tape Sand Paper Emery Cloth Signal Gongs and Hose Extension Cords and Fittings Spark Plug Testers and Cleaners Engine Cleaning Compounds Spouts - Oil Can Equipment of All Types Squeegees Exhaust Hose and Fittings Stones Exhaust Fans Tire Brushes Fender Protectors Tire and Tube Test Equipment Grinding Wheels Tools Grinding Compounds Trouble Lights, Cages and Bulbs Washing Compounds

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If it is unclear whether an item is taxable or non-taxable, it should be referred to Taxation and Property Records Division of the Department of Provincial Treasury. REPAIRS TO GOODS FOR RE-SALE OR LEASE A registered vendor who has goods repaired which form part of inventory of goods for resale is not subject to revenue tax (PST) on the material or labour charged for such repairs. For example, a motor vehicle being repaired for resale by a licensed dealer or for lease by a car rental agency would not be subject to revenue tax (PST) on either the material or labour provided the vendor account number and business class code are recorded. If the repairs are for the car dealer's own vehicle, for example, his service truck, then it is a purchase for own use and revenue tax (PST) must be charged, even if he quotes his vendor account number and business class code. WARRANTY REPAIRS If you replace or repair goods under warranty, free of charge, no revenue tax (PST) applies. However, there are various warranty plans requiring a partial payment or a deductible amount such as Drive or Power Train Warranties, Gold Plan, Extended Coverage and Insurance and each one is treated differently for purposes of revenue tax (PST). Drive or Power Train Warranties usually continue for a longer period than the normal warranty. In most cases a deductible amount is part of the warranty coverage. The only amount subject to revenue tax (PST) on a Drive or Power Train Warranty is the actual amount billed to the customer, (the deductible amount.) With a Gold Plan type of warranty the customer pays a fee to be covered under the warranty plan. The customer in this case, is still subject to revenue tax (PST) on the full amount of the deductible. For example; the deductible amount is $100.00. Under the Gold Plan the customer pays $25.00 and the Gold Plan pays $75.00. The customer is still liable for revenue tax (PST) on the $100.00 amount plus GST. On Extended Coverage and Insurance plans, the revenue tax (PST) applies to the total repair bill plus GST before the deductible amount is taken off. Some goods also carry a partial warranty - for example - tires where the customer is required to pay for tread wear. In these cases revenue tax (PST) is applied to the full amount charged to the customer. REPAIRS TO OWN GOODS A person who repairs his own goods or has such goods repaired by his own staff (i.e. paid employees) is not subject to revenue tax (PST) on the labour portion of such repairs. However, he must pay revenue tax (PST) on the cost of the parts used for such repairs.

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REPAIRS TO EXEMPT GOODS Repairs to goods which are exempt, e.g. farm machinery and production equipment, are not subject to revenue tax (PST). Certain parts for and repairs to vehicles registered under the International Registration Plan (IRP) are exempt of revenue tax (PST). If you have customers who are registered under IRP you should obtain a copy of revenue tax guide RTG:155 - Sales to Interjurisdictional Motor Carriers prior to making tax exempt sales to these customers. In ALL other cases, trucks, cars and other motor vehicles are not considered to be exempt goods, and repairs therefore are subject to revenue tax (PST). In the case of exempt repairs on exempt goods for farmers, fishers and aquaculturists, their Revenue Tax Exemption Permit number and the permit expiration date must be recorded on the invoice. REPAIRS AND REPAIR LABOUR ON MOTOR VEHICLES OWNED BY FARMERS, FISHERS AND AQUACULTURISTS ARE ALWAYS SUBJECT TO REVENUE TAX (PST). In the case of production equipment, the customer must confirm that the equipment repaired is used directly in the manufacturing process. TAXABLE ITEMS TO FARMERS, FISHERS AND AQUACULTURISTS Garages, service stations and the like often sell or repair goods for farmers, fishers and aquaculturists. Although farmers, fishers and aquaculturists enjoy many exemptions under the Revenue Tax Act, they are also required to pay revenue tax (PST) on a range of items. The following items are commonly mistaken as revenue tax (PST) exempt to farmers, fishers and aquaculturists, however, they are TAXABLE under the Revenue Tax Act and Regulations. These items are taxable whether the vendor installs them or not. This list is not an exhaustive list and is intended as a guide only. Items that arise where it is not clear whether taxable or not should be referred to Taxation and Property Records Division of the Department of Provincial Treasury. Anti-freeze Paint Air Compressors Paint Brushes Building Materials Pumps (except part of irrigation systems) Construction Machinery Refrigerators Electric Bulbs Stoves and Appliances (except for boats) Electric wiring for barns and housing Tools Flares Tractors below compact utility class and Accessories Flashlights Trailers except unregistered farm trailers Freezers Truck Boxes other than bulk boxes specifically designed Gas Cans to haul farm products, fertilizer or pesticides Grease Guns Water systems Lawnmowers Motor vehicles including farm trucks, ATV’s, motorbikes, snowmobiles, etc.



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REPAIRS TO NON-RESIDENT VEHICLES Any repair work completed on a vehicle owned by non-residents is taxable under the Revenue Tax Act. Both parts and labour are taxable based on the fact delivery of the parts and labour is within this province and is therefore consumed in this province. As long as possession of the goods and services is taken in Prince Edward Island, PEI revenue tax (PST) must be applied. The ultimate destination of the goods and services is immaterial. SERVICE CALLS Repair and installation labour on taxable goods is taxable. Charges for towing, battery boosting and Motor Vehicle Inspections are not taxable providing the charge is shown separately on your invoice. PARTS ALLOWANCES Where a vendor allows a credit for used parts, (e.g. the charge for a replacement pump and labour is $25.00 less a $5.00 allowance for the defective pump), revenue tax (PST) should be collected on the reduced charge ($20.00). The allowance for the defective unit is considered to be a trade-in and, in such cases, the revenue tax (PST) is computed on the difference. OTHER SALES COOKING FUEL SALES (CHARCOAL, NAPTHA, ETC.) Fuels used for the preparation of food or heating of premises are exempt from revenue tax (PST). CONFECTIONERY SALES Chocolate bars, chewing gum, etc. are taxable if the total sale of taxable goods amounts to more than $0.49. PREPARED MEAL SALES Prepared food products are subject to revenue tax (PST). For the purposes of this guide, prepared food products include food or beverages heated for human consumption, non-carbonated, non-alcoholic beverages when purchased with non-liquid food products, carbonated beverages, salads, sandwiches and similar products, platters of cheese, cold cuts, seafood, baked goods, fruit or vegetables, pastries, muffins, tarts, cookies, doughnuts, croissants, bagels, servings of pies or cakes and other baked goods and snack foods. SALE OF THE SERVICE STATION BUSINESS Before finalizing a sale of your business you should obtain, from the Provincial Tax Commissioner, a Clearance Certificate in duplicate stating that all taxes payable by you have been paid.

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After the sale is finalized you should return your Certificate of Registration to the Taxation and Property Records Division, pay any remaining tax due, and advise the office of the name of the purchaser and the date he or she took over the business. PROVINCIAL SALES TAX AND GST With the implementation of the Federal Goods and Services Tax, a registered vendor under the Prince Edward Island Revenue Tax Act is responsible for collecting revenue tax (PST) on the selling price of goods and services including the GST. FOR EXAMPLE: Selling price of goods $10.00 G.S.T. at 5% .50 10.50 P.S.T. at 10% 1.05 Total Price $11.55 ENVIRONMENT TAX The 1991 Provincial Budget introduced an Environment Tax on new tires. For purposes of the Environment Tax Act, a tire is considered to be "new" until it is sold at retail for the first time in Prince Edward Island. The Environment Tax at the rate of $4.00 per tire is to be collected from the consumer and remitted by the vendor on or before the 20th day of the month following the end of the reporting period. The $4.00 Environment Tax is to be shown separately from revenue tax (PST) on any invoice. Further Information For copies of the Revenue Tax Act, Revenue Administration Act and Regulations and any inquiries regarding this Revenue Tax Guide, please contact: Taxation and Property Records Division Department of Provincial Treasury P. O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca This guide is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this guide and the statutes, the statutes shall prevail.




Fax: (902) 368-6164

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RTG: 159 January 2004

GENERAL INSTRUCTIONS FOR VENDORS INTRODUCTION This guide is prepared to assist vendors registered under the Revenue Tax Act of Prince Edward Island in the collection and remittance of provincial revenue tax (PST). It is hoped the information contained in this booklet will assist you in carrying out your responsibilities as a vendor under the Prince Edward Island Revenue Tax Act and we welcome your comments and suggestions at any time. WHAT IS PROVINCIAL REVENUE TAX (PST)? The provincial revenue tax (PST) is a 10% tax which applies to the purchase, importation, lease or rental of most goods and certain services. The tax is applied to the retail selling price of taxable goods including the federal goods and services tax (GST). The legislative authority for the levying and collection of provincial revenue tax (PST) is the Revenue Tax Act and Regulations. Revenue tax (PST) is a consumption tax and is paid only once by the end user or consumer at the time of purchase or the taking of delivery for use in Prince Edward Island. RETAIL SALES A retail sale is a sale to a consumer for the purpose of use or consumption by that consumer and not for resale. When retail sales involve taxable goods, the tax is due and payable by the consumer at the time the sale takes place. VENDOR A vendor is a person, business or organization who sells or rents goods to consumers. All vendors making retail sales are considered to be agents of the Provincial Treasurer, and as such, shall levy, collect and remit the taxes imposed by the Revenue Tax Act on the purchaser or consumer of taxable goods. The tax is always due at the time the sale is made regardless of the method of payment (cash, charge, lay-away, installment etc.). The terms of payment have no bearing on the collection and remittance of tax.

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REGISTRATION A vendor must obtain a registration certificate under the Revenue Tax Act before selling goods to a consumer or another vendor. “Application for Registration as a Vendor” forms are available by visiting or contacting the Taxation and Property Records Division of the Department of the Provincial Treasury, Shaw Building, 95 Rochford Street, P. O. Box 1150, Charlottetown PE C1A 7M8 or any Access P.E.I. location throughout the province. Application forms are also available on the internet at www.taxandland.pe.ca. Once the “Application for Registration as a Vendor” is approved, a vendor kit will be issued which will include a “Certificate of Registration” which must be displayed prominently in the place of business for which it is issued; a letter providing the vendor’s Account Number, Primary Class Code and Reporting Period for remitting revenue tax (PST); a number of “Vendor Returns” and a list containing the “Business Class Codes.” SEASONAL VENDORS Seasonal Vendors when completing the “Application for Registration as a Vendor” must make sure the blocks on the back page of the form are filled in. By providing this information, the vendor’s account will automatically be activated in the starting month of the season and inactivated at the end of the season. “Vendor Return Forms” will be required only for the months the seasonal business is operating. RETURN OF REGISTRATION CERTIFICATE The registration certificate becomes invalid and must be returned to the Taxation and Property Records Division for correction or destruction when: (a) the name of the business changes (b) the address of the business changes (c) the business is sold (d) the nature of the business changes (e) the form of business (partnership, corporation or proprietorship) changes (f) the business closes permanently REPORTING Vendors must complete a copy of the “Vendor Return” form, a number of which were mailed out with the vendor registration kit. If a vendor would like to receive additional return forms, these will be supplied on request by contacting the Taxation and Property Records Division or any Access P.E.I. location. The “Vendor Return” form is used to report the two separate taxes, revenue tax (PST) and environment tax. Every vendor or retailer of taxable goods must complete the revenue





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tax (PST) portion of the return while only retailers or vendors of tires are required to complete the environment tax portion. Vendors required to report on a monthly basis, must report the tax collected for the previous month and both the return and the remittance must be received in the Taxation and Property Records Division office or at any Access P.E.I. location on or before the 20th day of the month. For example, the vendor return reporting the tax collected for the 31 days in March must be filed no later than the 20th day of April. Some vendors are only required to file returns on a quarterly, semi-annual or annual basis, depending on the amount of tax collected. A quarterly (March, June, September and December) return must be received on or before the 20th day of the month following the end of the quarter. Semi-annual (March and September) returns are to be received by April 20th and October 20th and annual returns are due at the end of the vendor’s season each year. Should a vendor not have any sales during a reporting period, the vendor is required to file a return marked “nil” for that period. COLLECTING AND REMITTING TAX Vendors who sell taxable goods act as agents of the Provincial Treasurer and must register and collect the tax on their sales. For collecting and remitting the tax, the vendor is allowed a monthly commission of 3% of the tax collected, up to a maximum of $500 per fiscal year of the government which runs from April 1 to March 31. Revenue tax (PST) is due and payable by the purchaser at the time of sale regardless of whether the sale is a cash, charge or installment sale. Where a sale is made and the purchaser refuses to pay the tax, the vendor shall immediately contact the Taxation and Property Records Division office and provide full details of the sale. FAILURE TO REMIT TAX Where a vendor fails (a) to file a return (b) to collect tax as required under the Revenue Tax Act (c) to substantiate his return with records. this office may make an estimate of (a) the amount of tax collected, (b) the tax which should have been collected, (c) the deposits made with such vendor which were not remitted

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and the estimated amount shall be due and payable to the Taxation and Property Records Division office. Every person who fails to file a return as and when required is guilty of an offence and on summary conviction is liable to a fine of not less than $100 in respect of each unfiled return. PENALTY, INTEREST AND LOSS OF COMMISSION A penalty at the rate of 5% of the tax collected will be assessed against any vendor whose tax return and remittance of tax is overdue. Any overdue tax will bear interest at a rate established in the regulations under the Revenue Administration Act. The vendors commission will be disallowed where his or her vendor return form is not filed by the due date. RECORDS All vendors will be visited periodically by a Tax Inspector or Tax Auditor. The purpose of such a visit is to ensure that the tax is being collected and remitted properly. The records required for examination are:

(a) Original records, e.g. sales invoices, purchase invoices and cash register tapes. Invoices should show the date, type of merchandise and tax charged.

(b) Details of exempt sales - e.g. details of sales made to Farmers, Fishermen, Aquaculturists, Status Indians, and the sale of goods to vendors for resale. Account numbers, primary class codes and/or permit numbers must be recorded and retained by the vendor on all tax exempt sales.

(c) Tax collected - tax records, vendor's copy of vendor return forms, records of payments, disposal of tax and commission taken.

(d) Records of goods taken from stock for the vendor's own use. DESTRUCTION OF RECORDS Vendors must obtain the written permission of the Provincial Tax Commissioner before any records can be destroyed. TAX APPLICATIONS The following are some examples of revenue tax (PST) applications for your information. 1. Goods Taken From Stock Where a vendor takes taxable goods from his own stock or inventory for his own use, he must account for the tax. Tax must be declared and remitted under the Tax On Purchases portion of the vendor return for the month in which the goods are removed from stock for use.

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2. Trade-Ins Trade allowances are not allowed on out-of-province purchases. 3. Cancelled Sales Where a sale is cancelled, and all money paid by the purchaser is returned, the vendor must also refund the tax. If only a portion of the purchaser's money is returned, tax will be refunded on that portion returned to the purchaser. 4. Discounts Where the cash discount is deducted from the purchase price at the time of the sale, the taxable amount is reduced by the discount amount. 5. Rental of Goods Rentals and leases are deemed to be sales, and as such are subject to tax. Where a vendor rents or leases goods, (machinery, equipment, etc.) together with the services of an operator, the transaction is deemed to be a service rather than a sale, and tax need not be collected. However, tax is applicable on the initial purchase of the machinery etc. 6. Finance Charges Finance charges are not taxable, provided they are shown separately on the invoice. 7. Sales to P.E.I. Status Indians Status Indians who reside on a Prince Edward Island reserve are exempt from tax on the purchase of goods that are to be consumed on the reserve. To purchase goods exempt of tax, the native person MUST produce a valid identification card issued by Indian Affairs and Northern Development Canada containing the name of the Status Indian, photo and band number. When selling goods tax exempt to a Status Indian a vendor must record the name and band number of the person and the Prince Edward Island reserve address in his or her sales records. There is no exemption for meals, alcoholic beverages and accommodation for Status Indians. 8. Guaranteed Replacement Parts If the replacement parts are supplied free of charge, no tax is due. 9. Delivery of Goods Where a vendor sells taxable goods and ships the goods for delivery outside the province, the tax does not apply to such sales. However, proof of delivery outside the province must be retained by the seller to justify non-collection of tax.

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Where a delivery of taxable goods is taken in the province, the tax must be collected regardless of whether or not the purchaser claims to be a non-resident. 10. Fair Value Vendors, in addition to being registered to collect the tax, also obtain goods for their own use or consumption. Tax is due on the "fair value" of such goods. "Fair value" is the total consideration given and includes: (a) the purchase price of the goods in Canadian dollars, (b) federal sales and excise taxes, (c) customs duties,

(d) installation where the cost is included in the consideration given for the acquisition of the goods,

(e) cost of material, transportation, labour, overhead, engineering, administration overhead, royalties (manufacturing).

11. Transportation Where taxable goods are purchased from a supplier located in the province, transportation costs are not taxable if shown separately on the invoice. Where taxable goods are purchased from a supplier located outside the province, transportation costs are always taxable. 12. Purchase of Business Assets Vendors are reminded that if they purchase business assets, they are responsible to remit tax on the purchase of any taxable supplies or equipment which are included in the sale. Examples would be office equipment, store equipment, stationery, and similar items which are for the vendors own use rather than for resale. 13. Sales to Federal Government Departments Federal government departments and their agencies may purchase goods exempt of revenue tax (PST) if the following procedure is followed. The goods must be purchased on a federal government purchase order or with a federal government credit card. Purchases by cash or by the use of a personal credit card by federal employees are not tax exempt and the vendor must charge revenue tax (PST) to the purchaser.

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VENDOR REGISTRATION NUMBER Every registered vendor is assigned his own individual account number. This number is important, since it grants him the authority to purchase goods of a class which he re-sells in the ordinary course of his business. The vendor account number consists of six digits, and the primary class code has four digits. The vendor account number and class code must be quoted when purchasing goods for resale. If a vendor is purchasing goods for own use or consumption, the account number and class code must not be used and the vendor must pay the tax to the supplier at the time of the purchase. If the supplier is not registered to collect the tax, then the vendor purchasing the goods, must remit the tax under the Tax on Purchases portion of the vendor return form for the month of purchase. USE OF REGISTRATION CERTIFICATE Holders of Registration Certificates shall use their Vendor Account Number and Business Class Code to purchase exempt of tax: 1. Goods which he normally resells in the ordinary course of his business; 2. Materials which will become part of goods for resale; Such persons shall, at the time of each purchase, quote their Vendor Account Number and Business Class Code Number. Vendors selling such goods tax free to holders of Registration Certificates, to justify the non-collection of tax and to protect themselves from being assessed tax, must show on their invoices the Account number and Class Code number of the purchaser to whom the goods were sold tax free. OFFENCES AND PENALTIES Holders of Registration Certificates who utilize their Account Numbers and Class Codes to purchase, free of tax, goods on which tax should be paid, commit an offence and are liable to penalties as provided under the Revenue Administration Act. GOODS FOR RESALE No vendor shall purchase goods for resale in the province unless he or she is a holder of a Registration Certificate. No vendor shall sell goods in the province at a retail sale unless he or she is the holder of a Registration Certificate. A vendor is permitted to sell, sales tax exempt, goods to another vendor who is the holder of a Registration Certificate provided the goods being sold are of a type which are normally sold in the ordinary course of the purchaser's business. This is indicated by the Class Code number provided by the purchasing vendor. EXAMPLE: Class Code number 2010 is the class code for a drugstore and that vendor would not be permitted to purchase building materials tax exempt by quoting his number. Class Code

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number 5030 is the class code for a service station business and the holder of the class code number would not be permitted to purchase furniture and appliances tax exempt. During the course of business, a vendor may be involved in making sales, which are tax exempt under Section 12 of the Revenue Tax Act to farmers, fishermen and aquaculturists. For instructions pertaining to such sales, please refer to the Revenue Tax Act Regulations, Sections 25, 28 and 28.1. BUSINESS CLASS CODES A complete list of Business Class Codes is included in the Vendor Information Package. Further Information For copies of the Revenue Tax Act, Revenue Administration Act and Regulations and any inquiries regarding this Revenue Tax Guide, please contact: Taxation and Property Records Division Department of Provincial Treasury P. O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca This guide is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this guide and the statutes, the statutes shall prevail.




Fax: (902) 368-6164

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RTG: 160 April 2004

APPLICATION OF REVENUE TAX TO GREEN FEES INTRODUCTION This guide provides information on the application of revenue tax (PST) to fees charged for golf memberships and green fees. Vendors are directed to RTG:101 - Rental of Golf Equipment for the application of revenue tax to other aspects of their operation. Effective March 31, 2004 revenue tax (PST) will apply to all golf memberships and green fees. APPLICATION Membership fees Membership fees (dues), which normally permit golf club members to play golf at the club without additional charge, are subject to revenue tax (PST) on the GST included selling price. Membership fees for the 2004 golf season that have been invoiced to club members prior to March 31, 2004 will not be subject to revenue tax (PST), regardless of when the fees are paid. If a golf club has communicated its 2004 membership rates to its members prior to March 31, 2004, and that communication is deemed to be similar to an invoice or billing, the membership fees will be considered to have been invoiced prior to March 31, 2004 and no revenue tax (PST) will be due. No revenue tax (PST) will be due on Royal Canadian Golf Association membership fees that are included in a membership fee provided: 1. The amount is shown separately on the membership invoice; and 2. The golf club pays the amount to the Royal Canadian Golf Association. No revenue tax (PST) will be due on initiation fees charged to first time members provided the amount is shown separately on the membership invoice. Rental charges for lockers which are affixed to the building are not subject to revenue tax (PST). Green fees Green fees are subject to revenue tax (PST) on the GST included selling price. Green fees for the 2004 golf season that have been booked prior to March 31, 2004 will not be subject to revenue tax (PST).


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Golf packages Golf packages such as Emerald cards and packages that include green fees and other services such as accommodations and meals are subject to revenue tax (PST) on the GST included selling price of the package. Golf packages for the 2004 golf season that have been booked prior to March 31, 2004 will not be subject to revenue tax (PST) on the green fee portion of the price. The Department considers vendors who sell golf packages to be in the business of reselling the components of the package. As a result, vendors will be able to purchase the components of the package, including green fees, exempt of revenue tax (PST) by quoting their vendor registration number and class code. These vendors will be required to collect, report and remit revenue tax (PST) on the GST included selling price of the package. Tournaments Tournament green fees are subject to revenue tax (PST) on the GST included selling price. Tournament green fees for the 2004 season that have been booked prior to March 31, 2004 will not be subject to revenue tax (PST). Evidence of booking prior to March 31, 2004 In order to support the non-collection of revenue tax (PST) on the above listed services the vendor must provide documentation showing that the booking took place prior to March 31, 2004. Proof should be in the form of written documentation that was created or obtained at the time of booking. This documentation must provide such information as the name and address of the customer, the confirmation number and the method of confirming the booking. Depending on the type of information available, it may be advisable for the club to copy this documentation and forward it to this office prior to April 30, 2004. This would eliminate any future dispute over the date of booking Vendor registration required Golf clubs, packagers and golf discounters who are not registered as vendors under the Revenue Tax Act must register with this office. Applications to register as a vendor are available at Taxation and Property Records Division, 95 Rochford Street, Charlottetown, any Access PEI office or on-line at www.taxandland.pe.ca.


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Further Information Golf clubs and other vendors of green fees are encouraged to contact this office to discuss the details of their particular situation. For copies of the Revenue Tax Act and Regulations and any inquiries regarding this Revenue Tax Guide, please contact: Taxation and Property Records Division Department of the Provincial Treasury P.O. Box 1330 Charlottetown PEI C1A 7N1 Telephone: (902) 368-4329 Fax: (902) 368-5380 Website: www.taxandland.pe.ca This guide is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this guide and the statutes, the statutes shall prevail.




Fax: (902) 368-6164

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RTG: 161 May 2004

APPLICATION OF REVENUE TAX TO FEES CHARGED TO PLAY MINIATURE GOLF

Introduction This guide provides information on the application of revenue tax (PST) to fees charged to play miniature golf. Application The definition of “goods” in clause 1(e) of the Revenue Tax Act includes admission charges. Admission charges are defined in the Regulations to the Revenue Tax Act as follow:

"admission charges" include entrance fees, cover charges or other fees charged for admission to a place of entertainment.

Miniature golf courses are places of entertainment. Therefore, the fees charged to play miniature golf are admission charges and are subject to revenue tax (PST). Revenue tax (PST) must be collected on the GST included price charged to play miniature golf. Vendors who charge a fee to their customers to play miniature golf must collect and remit revenue tax (PST) on all such fees commencing immediately. Vendor registration required Businesses that are not registered vendors under the Revenue Tax Act and that operate a miniature golf course must register with this office. Applications to register as a vendor are available at Taxation and Property Records Division, 95 Rochford Street, Charlottetown, any Access PEI office or on-line at www.taxandland.pe.ca.


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Further Information For copies of the Revenue Tax Act and Regulations, and any inquiries regarding this Revenue Tax Guide, please contact: Taxation and Property Records Division Department of the Provincial Treasury P.O. Box 1330 Charlottetown, PEI C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca This guide is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this guide and the statutes, the statutes shall prevail.




Fax: (902) 368-6164

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RTG: 162 July 2004

GENERAL INSTRUCTIONS FOR CONTRACTORS This guide is designed to assist contractors in Prince Edward Island to understand their obligations under the Provincial Revenue Tax Act and Regulations. Although this guide does not deal with all situations that could occur, it tries to simplify matters in providing contractors with the required information for remittance of revenue tax (PST). 1. Contractor Defined Section 1(h) of the Revenue Tax Act Regulations states:

"contractor means a person who undertakes for others the construction, repair or improvement of real property and includes subcontractors, general contractors and others who install or incorporate goods into real property for a person other than themselves and such goods become a part of or affixed to real property."

2. Construction Contractor A Construction Contractor may be classed in two ways: (a) General Contractor, (b) Subcontractor. The General Contractor usually deals directly with the person or entity that wishes the contract performed, while for the most part Subcontractors perform contracts for the General Contractor. Undertakings for the construction, repair or improvement of real property are generally executed in consideration of a lump sum, fixed price, unit price, time and material or cost-plus basis and when contractors or subcontractors perform such undertakings, they are, in all instances, the consumers of taxable goods used by them in fulfilling such contracts and must: (a) pay the revenue tax (PST) to their suppliers on such goods, where suppliers are

registered to collect Prince Edward Island tax, or (b) pay the revenue tax (PST) directly to the Provincial Treasurer where the goods are

purchased or leased from a source other than a registered vendor, such as a non-registered vendor outside the Province. Revenue tax (PST) in this situation is payable on the landed cost of the goods including out of province transportation.

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(c) In the case of a contractor who holds a Certificate of Registration, revenue tax (PST)

should be reported under the “Tax on Purchases” section of the vendor's monthly return form.

(d) pay tax on all machinery, tools, instruments and other goods, which they consume in

the execution of a contract. In fulfilling a contract a retail sale is not being made in the usual way, rather an improvement, repair, construction or alteration of real property is being sold, so therefore, in the billing of their customers, the Contractor should not show any revenue tax (PST) on his invoice. 3. Contractor/Manufacturer A contractor/manufacturer means a person who agrees to manufacture and install goods which become part of real property. A manufacturing contractor is a manufacturer who carries on a two-phase operation: (a) manufactures goods, and (b) contracts to erect, install or incorporate such manufactured goods into real property. Manufacturing contractors are liable for revenue tax (PST) on the fabricated or manufactured cost of goods they consume, in carrying out the provisions of their contract. "Fabricated or manufactured costs" includes the cost of material, transportation, shop labour, engineering, overhead, administration, royalties, the Goods and Services Tax (GST) and other federal taxes. Profit and on site erection labour are not included. 4. Contractor/Retailer A contractor/retailer is a vendor who carries on a two-phase operation: (a) Makes sales at retail. In this situation, he/she must register as a vendor under the

Act and collect revenue tax (PST) on these sales. This tax should be reported under the “Tax on Sales” section of the Vendor Return form.

(b) Perform contracts on real property. In this situation, separate records of the cost of

all taxable goods utilized in the performance of the contract must be kept and these taxes should be reported under the “Tax on Purchases” section of the Vendor Return form.

5. Contracts for Exempt Machinery and Equipment Clause 12(1)(i) of the Revenue Tax Act exempts machinery and apparatus used directly in the manufacturing process or production of goods for sale and clause 12(1)(i.1) exempts machinery purchased by manufacturers for pollution control.

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On contracts for the supply and installation of such machinery and apparatus the contractor should note that: (a) revenue tax (PST) will not apply on the exempt machinery and apparatus. (b) revenue tax (PST) will apply on all consumables and equipment used or consumed

in the erection or installation of the exempt machinery and apparatus. 6. Federal Government Contracts Retail sales made to any federal government department may be sold without charging revenue tax (PST) provided the order is accompanied by a federal government purchase order. Real property contracts, with the federal government, however, are to be treated by the contractor in the same way as any other customer. The contractor is considered the consumer of the goods and is responsible for the revenue tax (PST) on the landed cost of the materials consumed in fulfilling the contract. 7. Equipment Rental Revenue tax (PST) is due by the lessee on the fair value of the consideration given in payment of the lease or rental of any taxable equipment except where equipment is leased or rented with an operator. In this latter case the transaction is not deemed a rental but a non-taxable service and the lessor is subject to revenue tax (PST) on the fair value of the equipment purchased by him for lease or rent. 8. Non-Resident Contractor Where a non-resident contractor enters into a contract in Prince Edward Island, the non-resident contractor, on demand, shall deposit with the Provincial Treasurer: (a) a sum equivalent to 5% of the total amount to be paid under the contract, or (b) shall furnish the Provincial Treasurer with a guaranteed bond in a sum equivalent to

5% of the contract. Any person dealing with a non-resident contractor that has not satisfied the conditions in (a) and (b) above, shall deduct 5% of all amounts payable to the non-resident contractor to secure payment of the revenue tax (PST) payable. Where a person dealing with a non-resident contractor fails to comply with the above conditions, he/she is personally liable for payment of the revenue tax (PST) owing. For further reference, please refer to subsections 10(3),(4) and (5) of the Revenue Tax Act Regulations.

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9. Transportation Charges Where taxable goods are purchased from a supplier located outside the province, transportation charges form part of the contractor's landed cost and are, therefore, taxable. 10. Non-Resident Contractor's Equipment Equipment and other goods brought into the province for temporary use or consumption are subject to revenue tax (PST) calculated according to the under-noted formula: Tax = current tax rate x M x V 36 in which "M" equals the number of months such equipment and goods were located in the province and "V" equals the current (fair) market value of such equipment or goods. Guidelines to Temporary Use Formula: 1. Three years and under is considered temporary use. 2. Equipment is not taxed if in the province less than 12 days. 3. Tax on tools and parts must be paid to the province where purchased unless shipped

into Prince Edward Island tax free in which case revenue tax (PST) is due to Prince Edward Island.

4. Tax applies on the full rental charge for leased equipment. 5. Equipment is taxable if it is in the province for 12 consecutive days or more whether it

is being used or not. 6. Twelve consecutive days or more are considered to be a month. 11. Reporting Forms Certain information is required from contractors when a contract has been awarded and this information can be reported on the following two forms: (a) Contractor's Supplementary Return. (b) Report on Contracts and Subcontracts. The Contractor's Supplementary Return is necessary in order that the Taxation and Property Records office can identify remittances pertaining to a certain contract from other payments received. It also identifies the type and location of the contract as well as informs the Taxation and Property Records office whether the final payment of revenue tax (PST) is being made.

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The Report on Contracts and Subcontracts is to be completed by a General Contractor so the type and value of all subcontracts are identified. 12. Letter of Clearance Before final payment is made to a Contractor or Subcontractor, the owner or general contractor must obtain certification from the Taxation and Property Records office that all taxes have been paid. If the forms mentioned in Section 11 above are properly completed then a Letter of Clearance can be issued granting permission to release the final hold back. If a General Contractor or a Subcontractor does not merit a Letter of Clearance, the Provincial Treasurer may ask the owner or the General Contractor for an amount equal to the revenue tax (PST) due. This amount can be taken from any hold back due to the General Contractor or Subcontractor. 13. Progress Billings Revenue tax (PST) is usually due and payable in the month that goods are consumed in fulfilling contracts. However, where a contract extends over a long period of time and several progress billings are made, taxes may be remitted on the materials consumed relative to these progress billings. 14. Contractor's Records Contractors, both local and non-resident, are required to maintain adequate records for each project in sufficient detail for auditors appointed under the Revenue Administration Act to verify that taxes due to the Province of Prince Edward Island have been paid. INQUIRIES These instructions are prepared for the purpose of convenience only. For a more accurate or legal interpretation, reference should be made to the Revenue Tax Act and Regulations. Copies of the Revenue Tax Act and Regulations or any other information concerning revenue tax (PST) may be obtained from: Taxation and Property Records Division, Department of the Provincial Treasury, P. O. Box 1330, Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca




Fax: (902) 368-6164

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RTG: 163 June 2005

CLASSROOM SUPPLIES EXEMPT FROM REVENUE TAX (PST) This guide provides information to vendors who sell classroom supplies. The following listed classroom supplies may be purchased exempt of provincial revenue tax (PST) when purchased by students, teachers, or the parents or tutors of students, for use by a student attending an approved educational institution: clipboards construction paper crayons drawing books drawing instruments drawing paper duotangs erasers foolscap glue sticks graph paper highlighters ink looseleaf paper marker pens music manuscript paper paste pencil cases/boxes pencils pens pocket calculators ring binders rulers scissors scrapbooks scribblers sketch books workbooks Further Information For copies of the Revenue Tax Act and Regulations, and any inquiries regarding this Revenue Tax Guide, please contact: Taxation and Property Records Division Department of the Provincial Treasury P.O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca This guide is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this guide and the statutes, the statutes shall prevail.




Fax: (902) 368-6164

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RTG: 164 November 2005 (Revised November 2006)

RENEWABLE ENERGY EQUIPMENT TAX EXEMPTION This guide provides information to retailers, contractors and consumers on the application of revenue tax (PST) to renewable energy equipment. Effective April 8, 2005, the following renewable energy equipment is exempt of PST: 1. An organic combustion system that (A) has a name plate rating of 100 kilowatts or less, and

(B) complies with Canadian Standards Association (CSA) B415 or holds a US Environmental Protection Agency (EPA) certification,

including the combustion appliance, stoking and fuel delivery system of such appliance, and blowers and fans connected to the appliance, but not including the breaching, exhaust or chimney structure of the system or any materials or services necessary to house the system. This type of system includes stoves and furnaces that burn wood, wood pellets, sawdust and similar organic material.

The PST exemption on organic combustion systems has been extended to March 31, 2008. Organic combustion systems purchased after March 31, 2008 will be subject to PST.

2. A wind power energy generating system with a name plate rating of 100 kilowatts or less,

including the goods incorporated into the tower, turbine, turbine blades, transformers, switch gear, capacitors and circuit breakers of such a system, but not including the electrical cables from the turbine, the distribution cables, any below ground components of the tower or any anchoring system;

3. A biogas energy generating system with a name plate rating of 100 kilowatts or less,

including the generator and valves, the fittings and piping that transport the biogas to the generator, the bladder or cover for the digester, the power converter, control system, transformers, switch gear, capacitors and circuit breakers of the system, but not including manure storage systems, digesters or structures that house any component of the biogas energy generating system;

4. A geothermal heat pump energy generating system with a name plate rating of 100

kilowatts or less, including the dump well that receives the outflow water from the system, the piping, refrigerant solutions within the closed-loop heat pump system, the heat pump thermostat, and the heat pump (evaporator, compressor, condenser, coils, heat exchanger, valves, fans, blowers) that

(A) hold a rating of “Energy Star Qualified” by Natural Resources Canada or the US Environmental Protection Agency (EPA), and

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(B) comply with Canadian Standards Association (CSA) C448 Series-02; 5. A solar thermal energy collection system with a name plate rating of 100 kilowatts or

less, including solar thermal collector panels, pumps, tubing, heat exchanger, duct work, fans, insulated storage tanks and all major components that comply with

(A) the Canadian Standards Association (CSA) F379.1-88 for solar domestic hot water systems intended for year-round use or (CSA) F379.2-M89 for solar domestic hot water systems intended for seasonal use,

(B) Canadian Standards Association (CSA) F383-87, or (C) Canadian Standards Association (CSA) F378-87 (R2004) for solar air heating systems;

6. A solar photovoltaic energy collection system with a name plate rating greater than 0.1

kilowatt and equal to or less than 100 kilowatts that (A) complies with Canadian Standards Association (CSA) C61215-01, and

(B) includes solar photovoltaic collector panels, controllers and devices that convert direct current into alternating current and all major components; and

7. A drain water heat recovery energy collection device that

(A) conforms to American Society for Testing Materials (ASTM) B306 for the drain pipe design, (B) complies with American Society for Testing Materials (ASTM) B88 for the tubing design, and (C) is, in its entirety, approved for use in Canada with potable water consistent with Underwriter’s Laboratories of Canada (ULC) file #MH26850.

Anyone who has purchased an exempt renewable energy system after April 8, 2005, and has paid PST on the purchase, may apply for a refund of the PST paid. A refund may be claimed by completing a “Request for Refund of Revenue Tax (PST)” form and forwarding it together with the original purchase invoice or other supporting documentation to Taxation and Property Records Division. An application form may be obtained at any Access PEI office or on-line at www.taxandland.pe.ca.



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Further Information For copies of the Revenue Tax Act and Regulations and any inquiries regarding this Revenue Tax Guide, please contact: Taxation and Property Records Division Department of the Provincial Treasury P.O. Box 1330 Charlottetown, PEI C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca This guide is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this guide and the statutes, the statutes shall prevail.




Fax: (902) 368-6164

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RTG: 165 November 2005 (Revised December 2007)

WATER AND ENERGY CONSERVATION DEVICES This guide provides information on the revenue tax (PST) exemption which applies to water and energy conservation devices. The following water and energy conservation devices are exempt from PST:

• low flush toilets rated for six (6) litres per flush or less (effective March 31, 2004) • no flow urinals (effective November 2, 2007)

• low flow showerheads and aerators rated for ten (10) litres per minute or less

(effective November 2, 2007). FURTHER INFORMATION: For copies of the Revenue Tax Act and Regulations and any inquires regarding this Revenue Tax Guide, please contact:






Fax: (902) 368-6164

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RTG: 167 March 2006

PAYMENT OF REVENUE TAX ON THE PURCHASE OF USED MOTOR VEHICLES FROM USED MOTOR VEHICLE DEALERS

INTRODUCTION In December 2005 amendments to section 20.1 of the Revenue Tax Act were passed that prohibit used motor vehicle dealers, as defined in the Act, from charging and collecting revenue tax (PST) on the sale of used motor vehicles. These changes are effective April 1, 2006. This guide provides information regarding the payment of PST on the purchase of used motor vehicles. USED MOTOR VEHICLE DEALERS Used motor vehicle dealers are those dealers who have been issued a “Class C” dealer’s trade license under the Highway Traffic Act. Effective April 1, 2006 used motor vehicle dealers will no longer be permitted to charge and collect PST on the sale of used motor vehicles. After March 31, 2006, Access PEI will no longer accept a Motor Vehicle Dealer Receipt issued by a used motor vehicle dealer as evidence that the customer has paid PST. Instead, it will now be the responsibility of the vehicle purchaser to pay the PST directly to the Province. Used motor vehicle dealers will continue to be required to be registered as vendors for PST purposes. This is necessary to allow used motor vehicle dealers to purchase goods for re-sale exempt of PST, and for dealers to report and remit any PST collected on operations other than sales of used motor vehicles (e.g. vehicle repairs and servicing). Used motor vehicle dealers must continue to report all sales (including sales of used motor vehicles) and PST collected (on operations other than sales of used motor vehicles) on their monthly revenue tax (PST) returns. USED MOTOR VEHICLE PURCHASERS The purchaser of a used motor vehicle from a used motor vehicle dealer is responsible to pay the PST owing on the purchase directly to the Province. The PST must be paid at the time of purchase, and is calculated as 10% of the GST included net purchase price (after any allowance for an eligible in-province trade). Payment can be made at any Access PEI office; the purchaser may also register the motor vehicle at that time. When arranging financing for the purchase of a motor vehicle from a used motor vehicle dealer, purchasers should note that the purchase invoice will not include PST.

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NEW MOTOR VEHICLE AND OTHER DEALERS There is no change in the method used by new motor vehicle and other dealers to collect and remit PST on the sale of used motor vehicles. New motor vehicle and other dealers are those dealers who have been issued a “Class A, B, D or E” dealer’s trade license under the Highway Traffic Act. FURTHER INFORMATION For copies of the Revenue Tax Act and Regulations and any inquiries regarding this Revenue Tax Guide, please contact: Taxation and Property Records Division Department of Provincial Treasury P.O. Box 1330 Charlottetown, PEI C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca This guide is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this guide and the statutes, the statutes shall prevail.




Fax: (902) 368-6164

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RTG: 168 March 2006 (Revised July 2008)

REVENUE TAX EXEMPTION FOR THE PROVINCE OF PRINCE EDWARD ISLAND Introduction Effective April 1, 2006, certain Provincial Government of Prince Edward Island entities became exempt from the payment of revenue tax (PST) on the purchase of goods and services. The purpose of this guide is to provide vendors with information regarding the application of PST on sales made to the Provincial Government, and to provide a list of exempt entities. Application Exempt Government Entities The exemption applies to those departments or divisions of the public service set out in Schedule A to the Financial Administration Act, and Tourism PEI (excluding Golf Links Prince Edward Island Inc.). The names of the departments set out in Schedule A may change from time to time. As of May 22, 2008, the exempt government entities are: Department of Agriculture Department of Community, Cultural Affairs and Labour Department of Education and Early Childhood Development Department of Environment, Energy and Forestry Department of Fisheries, Aquaculture and Rural Development Department of Health Department of Innovation and Advanced Learning Department of Social Services and Seniors Department of the Provincial Treasury Department of Tourism Department of Transportation and Public Works

Executive Council Legislative Assembly Office of the Attorney General Office of the Auditor General Public Service Commission Tourism PEI (excluding Golf Links PEI)

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Process • A vendor may make a sale to the Provincial Government exempt of PST when the invoice

is issued in the name of one of the above exempt entities and/or the purchaser presents a purchasing card, credit card, local purchase order (LPO), purchase order (PO), work order (WO) or credit/service authorization (CSA) that is in the name of the Province of Prince Edward Island on behalf of one of the above entities.

• Purchasing cards and credit cards must be in one of the following names: Province of PEI Tourism PEI PEI Legislature PEI Health Dept and may also have an employee’s name on the card in addition to one of the above names. • Local purchase orders (LPO’s) and purchase orders (PO’s) must have one of the following

names preprinted on the LPO or PO form: Province of Prince Edward Island Provincial Treasury, Procurement Services, Office of the Comptroller Tourism PEI Materials Management East, Queen Elizabeth Hospital Materials Management West, Prince County Hospital • Credit/service authorizations (CSA’s) will be in the name of: PEI Health and Community Services or Department of Social Services and Seniors • Due to the recent and ongoing organizational transition in the Department of Health, work

order forms and credit cards used to make departmental purchases may be in the name of a PEI health region or health authority. Such purchases may be made exempt of PST after March 31, 2006.

• Purchases made by Provincial Government employees in their personal name are subject

to PST, even if the employee will be reimbursed by an exempt Provincial Government entity.

• As with all exempt sales, the vendor must retain sufficient evidence to substantiate the non-

collection of PST for each tax exempt sale to the Provincial Government. • The information to be recorded on, or attached to, the vendor’s copy of the sales invoice

includes the following, where applicable: o the name of the purchaser (department name, employee name) o the purchasing card or credit card number o a copy of the local purchase order (LPO), purchase order (PO), work order (WO)

or credit/service authorization (CSA)

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• Where the vendor issues only a cash register receipt for a sale paid by purchasing card or

credit card, the vendor must employ some method (such as a specific exemption code or a credit card reference to the customer name) to reference the exempt sale to the exempt Provincial Government entity purchaser.

• This new PST exemption for Provincial Government entities applies only to those entities

listed on the first page of this guide. Further Information For copies of the Revenue Tax Act and Regulations and any inquiries regarding this Revenue Tax Guide, please contact: Taxation and Property Records Division Department of the Provincial Treasury P.O. Box 1330 Charlottetown, PEI C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca This guide is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this guide and the statutes, the statutes shall prevail.




Fax: (902) 368-6164

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RTG: 169 January 2007 (Replaces RTG:107, issued in September 1989 and revised March 2006, and RTG:169 issued in March 2006 and May 2006)

NEW MOTOR VEHICLE DEALERS - OWN-USE MOTOR VEHICLES This guide provides information for new motor vehicle dealers on the application of revenue tax (PST) to motor vehicles used by dealers for their own use. There are two types of own-use motor vehicles - motor vehicles referred to as “Demonstrators”, which are assigned to particular members of a new motor vehicle dealer’s staff, as defined below, and all “Other” motor vehicles that are used by the dealership or other persons at the dealership’s expense. Demonstrators New motor vehicle dealers’ “Demonstrators” are not subject to PST. To qualify as a “Demonstrator” the motor vehicle must: 1. be a current model vehicle (i.e. the model year is the prior, current or following

calendar year) of a type normally resold by the new motor vehicle dealer; 2. be registered in the name of the new motor vehicle dealer; and 3. be assigned to (a) an owner-manager who is directly involved in vehicle sales of the dealership; or (b) a new motor vehicle sales manager or salesperson. Other Own Use Motor Vehicles Effective June 1, 2006 the calculation of PST due on “Other” own use motor vehicles will change. “Other” own use motor vehicles include the following:

• Motor vehicles assigned to an owner-manager of the dealership who is not directly involved in vehicle sales of the dealership.

• Motor vehicles assigned to or pooled to be driven by

(a) department heads such as the controller, accountant, parts manager, service manager, and other employees;

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(b) members of the owner-manager's family; and (c) members of any other employee’s family.

• All other motor vehicles used by motor vehicle dealers, including courtesy vehicles assigned for customers' use, service and parts vehicles, and any other vehicle used by the dealer for any purpose not otherwise mentioned in this guide.

Revenue tax is due on the new motor vehicle dealer’s “Other” own use motor vehicles for each month of usage on the following basis:

10% X 1/72 of dealer's cost (including GST) of each vehicle used during the month

For the purpose of this guide, 12 consecutive days or more is considered to be a month. The new motor vehicle dealer must report the PST due monthly in the “Tax on Purchases” section of the sales tax return for each month in which the motor vehicle was used. The revenue tax on “Other” own use vehicles must be remitted, together with other taxes owing, on or before the 20th day of the month following the reporting period. New motor vehicle dealers are reminded that they must maintain sufficiently detailed records to calculate, report and remit the amount of PST due on “Other” own use motor vehicles, for audit purposes. Further Information For copies of the Revenue Tax Act and Regulations and any inquiries regarding this Revenue Tax Guide, please contact: Taxation & Property Records Division Department of Provincial Treasury P.O. Box 1330 Charlottetown, PEI C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca This guide is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this guide and the statutes, the statutes shall prevail.




Fax: (902) 368-6164

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RTG: 170 October 2006

USE OF TAX EXEMPT MACHINERY AND EQUIPMENT IN PUBLICLY TENDERED WORK Introduction This revenue tax guide provides information on the use of tax exempt machinery and equipment. If a farmer or aquaculturist uses a tractor, front end loader, snow blower, snow plow, or other equipment which was purchased PST exempt, for publicly tendered work, then PST becomes payable on the fair value of that equipment for the duration of the job. Payment of Revenue Tax (PST) It is the responsibility of the farmer or aquaculturist to report and pay the PST due on any equipment which was acquired PST exempt for farm or aquaculture use, and subsequently used for publicly tendered work. PST is due at the time of accepting publicly tendered work. Calculation of Revenue Tax (PST) Payable If the equipment is leased by the farmer or acquaculturist, the calculation of the PST due is as follows:

Total annual lease payments (including GST) / 12 X number of 30 day periods in contract or job term (rounded to one decimal place) X 10%

If the equipment is owned by the farmer or aquaculturist, the calculation of the PST due is as follows:

FV X 10% X number of 30 day periods in contract or job term (rounded to one decimal place) / 36

Where

FV is the fair value of the equipment, which may be determined by reference to a trade valuation guide or an appraisal by a farm equipment dealer, at the time of accepting the publicly tendered work.

The tax payable may be reported on a Revenue Tax (PST) Self-declaration form, which may be obtained at any Access PEI centre, Taxation and Property Records Division or online at www.taxandland.pe.ca.



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Use of Marked Fuel Farmers and aquaculturists who use marked fuel in equipment used in publicly tendered work must self-assess gasoline tax on the quantity of fuel used. The tax payable is calculated as:

Number of litres of marked fuel used on publicly tendered work during each month X gasoline tax rate per litre for each month

Non-Compliance The Provincial Tax Commissioner may cancel or suspend a Tax Exemption Permit if the holder of the permit fails to comply with the conditions or restrictions under which the permit was issued. In addition, the revenue tax and/or gasoline tax owing with respect to equipment used in publicly tendered work will be assessed, with interest, to any farmer or aquaculturist found to be in non-compliance with the legislation. Other Information In the future, individuals or businesses negotiating or bidding on provincial government contracts (including contracts with hospitals, manors and school boards) to provide snow clearing, brush cutting and similar services will be required to certify that they paid PEI revenue tax (PST) on the equipment which will be used to provide the contracted services. These certifications that tax was paid will be subject to audit. Further information, clarification or Revenue Tax (PST) Self-declaration forms may be obtained by contacting: Taxation and Property Records Division P.O. Box 1150 Charlottetown, PE C1A 7M8 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca This guide is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this guide and the statutes, the statutes shall prevail.





Fax: (902) 368-6164

RTG: 171 CAR WASH OPERATIONS February 2007 Introduction This revenue tax guide explains how revenue tax, also called provincial sales tax (PST), applies to the following types of car wash operations:

• Self-Serve Car Wash • Automated Car Wash • Manual Car Wash • Combined Manual/Automated Car Wash

Persons who sell taxable goods or services must register as vendors to collect and remit PST on all taxable sales. Register by completing and submitting an Application for Registration as a Vendor form, available at any Access PEI office or on-line at www.taxandland.pe.ca Self-Serve Car Wash In most self-serve car washes, the customer parks his or her vehicle inside a bay fitted with car cleaning equipment such as soap/water sprayers, scrub brushes and vacuum stations. The customer pays a fee to the car wash operator for the right to use the wash bay and the equipment in it to clean his or her own vehicle. The fee paid by the customer to use the wash bay and equipment is not subject to PST. Automated Car Wash Automated car washes often consist of tunnel-like bays into which a customer drives his or her vehicle. The driver remains inside the vehicle while machinery inside the bay alternately sprays water, soap, and sometimes wax on the vehicle. The process is fully automated and no human labour is expended to wash, dry or wax the vehicle. The fee paid by the customer to use an automated car wash is not subject to PST. Manual Car Wash The Revenue Tax Act defines “repair and installation labour” as a “good.” The Regulations to the Revenue Tax Act define “repair and installation labour” to include the labour expended to clean taxable goods. Therefore, the GST included fee paid by a customer for a manual car wash is subject to PST. Combined Manual/Automated Car Wash In some instances, car wash operations involve both manual and automated components. Where the car wash operator provides the manual labour to hand wash, dry or wax all or part of the vehicle, before or after the vehicle goes through an automated car wash facility, the total GST included fee paid by the customer for the car wash is subject to PST.

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Retail Sales of Soap, Shampoo, Wax, Air Fresheners, etc. Some car wash operators sell cleaning or other products for a fee that is separate from the fee charged to use the car wash. Such retail or vending machine sales of cleaning and other products are subject to PST on the GST included selling price. Car Wash Equipment

The purchase of car wash equipment is taxable to the car wash operator on the GST included

purchase price, including the cost (if any) to ship the equipment into the province. Installation charges and repairs to car wash equipment are also taxable to the car wash operator. This interpretation, that car wash equipment is taxable as a good, and is not real property, is effective February 1, 2007.

Consumables

The purchase of taxable consumables, such as soap, shampoos, wax, air fresheners, vacuum

bags and other required supplies, used by the car wash operator in all types of car wash operations are taxable to the car wash operator on his or her GST included cost.

Goods for Re-Sale A car wash operator who is a registered vendor may purchase goods for retail sale, such as soap,

shampoos and wax sold at retail or through vending machines, exempt of PST, by providing the supplier of these goods with his or her vendor registration number and class code.

Payment of tax on Purchases If the car wash operator does not pay PST to his or her supplier at the time of purchase of car

wash equipment or consumables, the car wash operator is responsible to self-assess and pay the PST as follows:

If a registered vendor - in the “Tax on Purchases” section of the revenue tax return for the period in which the consumables were purchased, or

If not a registered vendor, on a Revenue Tax (PST) Self-declaration form. Further Information

For copies of the Revenue Tax Act and Regulations, forms and any inquiries regarding this Revenue Tax Guide, please contact:

Taxation and Property Records Division Department of the Provincial Treasury P.O. Box 1330 Charlottetown, PEI C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca





Fax: (902) 368-6164

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RTG: 172 August 2007 (Updated September 2008)

THE APPLICATION OF REVENUE TAX (PST) TO MEDICAL EQUIPMENT AND SUPPLIES

LEGISLATION The Revenue Tax Act and Regulations specifically provide for the exemption of certain medical and health equipment and supplies.

1. Section 12 (1)(g.2) states: “A consumer is not liable to pay the tax in respect of the consumption of dentures, dental and optical appliances when purchased on the prescription of a dentist, optometrist or medical practitioner.”

2. Section 12 (1)(h) states: “A consumer is not liable to pay the tax in respect of the

consumption of artificial limbs, orthopedic appliances and equipment designed solely for the use of the physically handicapped.”

3. Section 12 (1)(h.1) states: “A consumer is not liable to pay the tax in respect of the

consumption of hearing aids.”

4. Section 12(1)(h.2) states: “A consumer is not liable to pay the tax in respect of the consumption of drugs and medicines when purchased on the prescription of a medical practitioner, dentist or veterinarian.”

5. Section 1(1)(p.2) of the Revenue Tax Act Regulations states: “In the Act or these

regulations, orthopedic appliances and equipment includes footwear when purchased on the prescription of a physician as well as footwear purchased by amputees and polio victims.”

DEFINITIONS For the purposes of the Revenue Tax Act and Regulations, the term “prescription” refers to a limited number of items.

a) dentures, dental and optical appliances;

b) orthopedic footwear; and

c) prescription drugs and medicines Prescription drugs and medicines are those that must be purchased on a prescription by a medical practitioner, dentist or veterinarian pursuant to the Federal Food and Drug Act.

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Prescriptions for hospital beds and other taxable equipment and supplies does not allow the consumer to purchase these items exempt of revenue tax (PST). EXEMPT EQUIPMENT AND SUPPLIES The following items may be purchased by consumers exempt of revenue tax (PST). manual wheelchairs power wheelchairs parts, batteries and accessories for wheelchairs scooters seating systems van/car lifts canes crutches walkers/rollators tub rails/bars tub/ shower seats commodes lifts/elevators stair glides wheelchair ramp systems OTC wraps and braces braces with metal stays custom wraps and braces support hosiery collars orthopedic footwear orthopedic pads orthopedic lifts clothing ostomy wafers ostomy falanges ostomy bags ostomy pouches all breast forms

brassieres (mastectomy) swimwear (mastectomy) alarm devices decoders (hearing impaired) hearing aids (parts and batteries) visual ear telecaption units telephone devices artificial limbs arch, ankle and knee supports prosthesis prescription drugs sacroiliac belts and supports shoulder braces spinal braces surgical supports trusses and parts incontinence supplies including pads shields, diapers, pants and covers (bed/chair) compressors (maxi-mist machines) nebulizers masks and tubing meal replacement nutritional products blood glucose monitors syringes lancets test strips eye glasses

Note: this is not an exhaustive list and any questions regarding the revenue tax status of any item should be referred to Taxation and Property Records.

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TAXABLE EQUIPMENT AND SUPPLIES The following items are subject to revenue tax (PST) and the tax must be paid by the consumer at the time of purchase. bedside drainage bags plastic medicine cups catheter and irrigation trays padding ripple pad and pump disposal containers thermometers dressing trays toothette paper portion cups autoclave tape micropore tape dermicel tape transpore tape bath mats hand-held showers hospital and chromatic beds hospital bed mattresses rails overbed tables pressure mattress and pump trapeze I.V. poles pillows mattress pads wedges rings OBUS forme lumbar pads cervical rolls utensils card holders reachers weights putty exercise bands cones duoderm deodorant powders adhesives wipes catheters

lubricants tubing urinals bed pans Sitz bath air cleaners meters, regulators suction machines humidifiers vapourizers decalcifiers sprays solutions pumps bandages gauze dressings wraps tapes cotton rolls and balls disinfectant scissors hot/cold packs forceps slings ice bags cast covers T.E.N.S. and accessories breast pumps and accessories massagers heating pads stethoscopes bedwetting alarms batteries scales blood pressure monitors pulse monitors heart monitors pregnancy tests vitamins, minerals and food supplements non-prescriptions and patent drugs and medicines hot water bottles

gloves (cloth, rubber and disposable)

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Note: this is not an exhaustive list and any questions regarding the revenue tax status of any item should be referred to Taxation and Property Records. INSTALLATION AND REPAIR OF TAX EXEMPT MEDICAL EQUIPMENT Where a contractor is contracted to supply and install exempt medical equipment such as wheelchair ramp systems, lifts, elevators, or stair glides for the use of the physically handicapped, the contractor may purchase such items exempt of revenue tax (PST). The contractor would, however, have to pay the PST on all other taxable goods consumed in the performance of the contract. No PST is due on labour charges associated with the installation, repair or maintenance of tax exempt medical equipment. FURTHER INFORMATION This circular is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of the guide and the statutes, the statutes shall prevail. For copies of the Revenue Tax Act and Regulations and any inquires regarding this Revenue Tax Guide, please contact: Taxation and Property Records P.O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca




Fax: (902) 368-6164

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RTG: 173 August 2007

LICENSING FEES ON ENTERTAINMENT DEVICES LEGISLATION The Revenue Tax Act Regulations require that all entertainment devices be licensed and that an annual licensing fee be paid. Section 40. (2) of the Revenue Tax Act Regulations states: “The owner of an entertainment device shall, before the entertainment device is installed at a location to which the public, or some of them, have access, apply to the Minister for an entertainment device license on a form provided by the Minister.”

DEFINITIONS For the purposes of the Revenue Tax Act Regulations, the term “entertainment device” refers to “an apparatus, machine, contrivance or other device operated for gain the purpose of which is to provide amusement or recreation for the public and which provides no valuable reward to the player other than the opportunity to replay the device and does not include a video lottery device” [Revenue Tax Act Regulations Section 40. (1)]. This definition includes pool tables, video games, game terminals, jukeboxes, and kiddie rides. ANNUAL FEES Each entertainment device is subject to an annual licensing fee of $200.00, except for coin-operated kiddie rides designed for children eight years of age and under, which are subject to an annual licensing fee of $50.00 for each device. FURTHER INFORMATION This circular is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of the guide and the statutes, the statutes shall prevail. For copies of the Revenue Tax Act and Regulations and any inquires regarding this Revenue Tax Guide, please contact: Taxation and Property Records P.O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca




Fax: (902) 368-6164

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PORTABLE TOILETS

This guide provides information on the application of revenue tax (PST) to the rental of portable toilets. The rental of portable toilets with no related cleaning, servicing, and waste collection and disposal services is subject to revenue tax (PST) on the GST-included rental charge. As a result, portable toilet rental businesses that do not provide cleaning, servicing, and waste collection and disposal services may purchase portable toilets exempt of revenue tax (PST) by providing their vendor registration number and class code to the supplier. These rental businesses will be required to register as vendors under the Revenue Tax Act and collect, report, and remit revenue tax (PST) on the GST-included rental charge of the portable toilets. Portable toilet rentals that also include cleaning, servicing, and the collection and disposal of waste are not subject to revenue tax (PST). The primary service being provided under such contracts is waste collection and disposal which is a non-taxable service. Under these circumstances, portable toilet service businesses are required to pay revenue tax (PST) on the purchase of the portable toilets and any supplies used in servicing the portable toilets, including toilet tissue. No revenue tax (PST) is due on the service contract, and revenue tax (PST) should not be shown on the customer’s invoice. FURTHER INFORMATION For copies of the Revenue Tax Act and Regulations and any inquires regarding this Revenue Tax Guide, please contact: Taxation and Property Records P.O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca This guide is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this guide and the statutes, the statutes shall prevail.


Pro vincial Treasury Taxation and Property Records PO Box 1330 Charlottetown, PE Canada C1A 7N1 Tel: (902) 368-4171 Fax: (902) 368-6164 Fax: (902) 368-6164

RTG: 175 September 2007 RTG: 175 September 2007 (Revised June 2008) (Revised June 2008)

FARMING INCOMEFARMING INCOME

This guide provides information on the calculation of gross annual income from farming. LEGISLATION Revenue Tax (PST) The Revenue Tax Act provides for an exemption from PST on purchases of machinery and equipment (including parts therefor), as defined by regulation, when purchased (i) by a farmer who holds a valid Revenue Tax Exemption Permit, and (ii) for farm use, and not for any other commercial operation. A “farmer” is defined in the Regulations to the Revenue Tax Act, and includes:

(i) an individual, corporation or partnership that is actively engaged in farming or custom agricultural contracting, and earns at least $10,000 or 25 per cent of his or her gross annual income from farming and from custom agricultural contracting, or (ii) an individual, corporation or partnership that is registered in the Future Farmer Program.

Property Tax A bona fide farmer may qualify for a Farm Assessment pursuant to the Real Property Assessment Act. A “bona fide farmer” is defined in the Real Property Assessment Act, and includes:

(i) an individual, corporation or partnership that owns a farm, is actively engaged in farming, and earns at least $10,000 or 25 per cent of his or her gross annual income from farming, or (ii) an individual, corporation or partnership that owns a farm and is registered in the Future Farmer Program.

DETERMINATION OF GROSS ANNUAL INCOME FROM FARMING

In order to determine if an individual, partnership or corporation meets the above definitions of a farmer, the individual, partnership or corporation must provide Provincial Treasury with the most recent income tax return(s), including Schedules and Notice(s) of Assessment and a copy of the most recent financial statements, where applicable.

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In those situations where the individual, partnership or corporation does not meet the above definitions of a farmer based on the most recent financial information, Provincial Treasury will determine gross annual income from farming based on financial information from the last four years. This is done based on a calculation using average gross annual income and average gross annual income from farming for the last four years. This calculation will determine the gross annual income from farming for the purposes of the definitions above. In order to perform this calculation, Provincial Treasury must be provided with copies of the income tax return(s), including Schedules and Notice(s) of Assessment and copies of the financial statements, where applicable, for the most recent year and the previous three years. For PST and property tax purposes, income from the following sources is not considered to be income from farming: sale of sand, gravel, and shale sale of harvested wood sale of farm equipment rental of farm equipment without an operator snow removal training, racing, handling, or boarding of horses keeping of riding stables FURTHER INFORMATION For copies of the Revenue Tax Act and Regulations and any inquiries regarding this Revenue Tax Guide, please contact:

Taxation and Property Records Division Department of the Provincial Treasury P.O. Box 1330 Charlottetown, PEI C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca





Fax: (902) 368-6164

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RTG: 176 June 2008

The Application of Revenue Tax to Refrigeration Equipment This guide is intended to provide information on the application of revenue tax (PST) to the sale, installation, repair and maintenance of various types of refrigeration equipment. TAXABLE GOODS The following refrigeration equipment are taxable goods: Pre-fabricated walk-in coolers Pre-fabricated walk-in freezers Free standing refrigerators and coolers Free standing freezers Prep tables Display cases Rack type refrigeration units (such as open chest freezers, rack coolers or beer fridges,

regardless of whether or not the compressors or condensers are contained within the unit)

Ice cream and frosty machines Ice machines Compressors Condensers All charges to customers to supply, install, repair or maintain the goods listed above are taxable on the GST included selling price. This includes charges to customers for equipment, parts, materials and labour associated with the work. Businesses performing this type of work are required to register as vendors under the Revenue Tax Act and to collect, report and remit PST on the GST included price charged to their customers. Vendors who supply, install, repair or maintain these goods may purchase the equipment, parts and materials to carry out the work exempt of PST. In order to purchase the goods exempt of PST, the vendor must provide its vendor registration number and class code to the supplier. Connection of Taxable Goods to Real Property It may be necessary to connect the goods listed above to the permanent wiring and plumbing of the building in which the equipment will be located. Only this portion of the work is considered to be a real property supply and install contract. In a real property contract, the contractor is the consumer of the materials used in completing the contract. Accordingly, the

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contractor must pay PST on the cost of materials consumed in completing the real property portion of the work. No PST is due on the labour portion of a real property contract, and PST should not be shown on the customer’s invoice for real property work. WALK-IN COOLERS AND FREEZERS FORMING PART OF REAL PROPERTY The walls of a walk-in cooler or freezer, that form the exterior walls of the building in which the cooler or freezer is located, are considered to be real property. Only the portion of the walk-in cooler or freezer that forms part of the building is real property. The work to supply, install, repair or maintain the cooler/freezer walls that form the exterior walls of the building is a real property contract. The real property contractor must pay PST on the cost of parts and materials used in completing the contract. No PST is due on the labour, and PST should not be shown on the customer’s invoice. However, the supply, installation, repair or maintenance of the condenser or compressor is not a real property contract, and is always subject to PST. COMBINED TAXABLE GOODS AND REAL PROPERTY WORK If one lump sum price is billed to a customer for real property work and for the supply, installation, repair or maintenance of a taxable good, (a) PST must be charged on the total amount if the portion of the billing for the taxable

good is 50% or more of the total amount billed, and (b) PST is not charged if the portion of the billing for the work on real property is more than

50% of the total amount billed. If one invoice provides separately priced lines for work done on real property and work done on taxable goods, PST must be charged on the GST included fee for the work (equipment, parts, materials and labour) on taxable goods. No PST is charged on the GST included fee for work on real property.

FURTHER INFORMATION For copies of the Revenue Tax Act and Regulations and any inquiries regarding this Revenue Tax Guide, please contact: Taxation and Property Records Division P.O. Box 1330 Charlottetown, PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca This guide is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of the guide and the statutes, the statutes shall prevail.




Fax: (902) 368-6164

RTG: 177 October 2008 PET FOOD AND LIVESTOCK FEED

This guide provides information on the application of revenue tax (PST) to pet food and livestock feed. PET FOOD On June 18, 1993, clause 12(1)(v.1) of the Revenue Tax Act, which provided a general exemption from PST on the purchase of pets and pet food, was repealed. Effective that date, pets and pet food became subject to PST. (Refer to RTG:149 for more information). Pet foods are taxable goods, and are subject to PST, regardless of where purchased. Taxable pet food includes, but is not limited to:

Therapeutic, diet, organic, medicated or other specialty pet food (even if purchased on the advice, direction or prescription of a veterinarian)

Food purchased to feed wild birds

LIVESTOCK FEED AND AGRICULTURAL FEEDS Clause 12(1)(j.2) of the Revenue Tax Act provides an exemption to all purchasers of agricultural feeds, including grain, milled products and other agricultural feeds. A farmer who is in possession of a valid Revenue Tax Exemption Permit may purchase livestock feed exempt of PST when acquired for farm use and not for any other commercial operation. (Refer to RTG: 109 for more information). FURTHER INFORMATION For copies of the Revenue Tax Act and Regulations and any inquiries regarding this Revenue Tax Guide, please contact:

Taxation and Property Records Division Department of Provincial Treasury PO Box 1330 Charlottetown PE C1A 7N1 Telephone: (902) 368-4171 Fax: (902) 368-6164 Website: www.taxandland.pe.ca



rtg: 101 may 1989 (revised october 2002) rental of golf ... · this cost is determined to be the...

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