News and Insights

Saskatchewan Information Bulletins re: Warranty Contracts

Tax Development Oct 27, 2010

The province of Saskatchewan has updated several bulletins to clarify how PST applies to manufacturer’s extended warranty contracts and equipment warranty insurance contracts.  

Optional manufacturer’s extended warranty contracts are subject to PST, including any deductible charges related to such contracts for new and used equipment, farm machinery, motor and recreational vehicles.  Any charges to transfer an existing contract to another owner are also subject to PST.

Equipment warranty insurance contracts differ from a manufacturer’s extended warranty as the equipment warranty insurance contracts are underwritten by an insurance company and a dealer selling these contracts must be licensed with the Insurance Councils of Saskatchewan.  Dealers selling equipment warranty insurance contracts for new or used equipment, farm machinery, motor or recreational vehicles do not collect PST on the sale of these contracts, as tax is paid when the customer or insurance provider is invoiced for the repair.  

SK PST-16