The province of Saskatchewan has recently revised bulletin PST-28, “Information for Asphalt Paving Contractors and Suppliers of Asphalt Paving Mixtures”, which provides information on how provincial sales tax applies to supplies made by asphalt paving contractors. This bulletin has been renamed from the previous version, which had included information on the sale of other types of materials, such as sand and gravel, which are used by road builders. Information regarding the application of PST to these other types of materials may be found in the newly released bulletin PST-71, “Information for Suppliers of Sand, Gravel, Crushed/Screened Bases and Decorative Rock”.
Information Bulletin PST-28 now clarifies that supply only sales of asphalt mixtures, including hot mix, cold mix and specialty mixtures, are subject to tax; however, delivery and loading charges are exempt from tax when segregated on the customer’s invoice. In addition, supply only sales made to the following are exempt from PST:
- federal government departments and agencies;
- customers where goods are purchased for resale by registered retailers, with the vendor’s license number recorded;
- goods shipped outside Saskatchewan by the retailer;
- goods provided to a status Indian or Indian band, delivered to a reserve by the retailer. The identification number from the Certificate of Indian Status card must be retained, as well as proof of delivery to the reserve.
Contractors that supply and install asphalt paving mixtures are considered to be the consumers of the materials used, and are required to pay tax on the cost to acquire or manufacture those goods. The bulletin discusses and illustrates how to calculate tax on the manufactured cost, when the contractor supplies any portion of the raw materials.
Information Bulletin PST-71 discusses the application of tax to both supply only and supply and install sales of sand, gravel, crushed/screened bases and decorative rock. Product that is delivered and unloaded or dumped at the customer’s specified location without any spreading, leveling or compacting is considered a supply only sale, and PST would apply. However, a sale that includes delivery of the material, and then spreading, leveling or compacting of the material would be considered a supply and install real property contract. In these cases, the contractor is required to pay tax on the cost of materials used in the contract.