The province of Prince Edward Island has issued three new guides and revised several others to clarify the circumstances when specific types of supplies made in the province are taxable or exempt.
Revenue Tax Guide 179, “Sawmills” provides information for sawmill operators on the application of PST to various types of sales made by a sawmill operator. Under the Revenue Tax Act, sawmill operators are considered to be manufacturers or producers.
Another new guide, RTG-180, “Municipalities”, clarifies the application of PST for goods purchased by a municipality in the province for its own use and not for resale. The guide lists specific goods that may be purchased exempt of PST by a municipality for its own use, and circumstances where a municipality may apply for a rebate of PST. For example, municipalities may purchase structural steel, timber and aluminum used in the construction and repair of bridges exempt of PST. In addition, municipalities may apply for a rebate of PST, where a contractor has paid PST on liquid asphalt and included the tax in the contract price billed to the municipality.
A third guide, RTG-181, “The Application of Revenue Tax (PST) to Swimming Pools and Hot Tubs”, has been issued to explain the application of PST to the sale, installation , repair and maintenance of various types of swimming pools and hot tubs sold in the province. Generally, the tax status of goods or related services in respect of swimming pools and hot tubs will depend on whether the pool or hot tub is considered tangible personal property or real property. The province considers in-ground swimming pools, above ground swimming pools enclosed by a deck structure, hot tubs built into a deck structure or deck and fence construction to be real property.
The province also revised guides RTG-157, “Food and Beverages” and RTG-135, “Snack Foods” to more clearly categorize the types of food and beverages that are considered taxable. Tax also applies to prepared food products purchased from an eating establishment. Guide RTG-157 defines prepared food products and eating establishment and also gives examples where tax does not apply to the sale of prepared food products.
In addition, guide RTG-168, “Revenue Tax Exemption for the Province of Prince Edward Island” has been updated to reflect the current list of departments or divisions of provincial government entities in Prince Edward Island that are entitled to purchase goods and services exempt of PST.