Retail Sales Tax Rate and Calculation of Tax Due

This section provides information on the Retail Sales Tax rate in the Province of Prince Edward Island. This section also provides important information on the calculation of the amount of Retail Sales Tax due. 

What is the rate of Retail Sales Tax?

The Retail Sales Tax (RST) rate is 15% (14% prior to October 1, 2016).

How do I calculate the amount of Retail Sales Tax to be paid on designated property that is a vehicle?

Retail Sales Tax on designated property which is a vehicle is due on the greater of:

  1. The declared purchase price; and
  2. The average wholesale value as set out in the Canadian Red Book or the average wholesale value as set out in the Canadian Sport Vehicle Blue Book.

A purchaser may substitute a written appraisal of the vehicle for the Red Book or Blue Book value.

The declared purchase price should be supported by a Bill of Sale, or similar document, if the vehicle was acquired through a purchase.

For vehicles not covered by the Canadian Red Book or Canadian Sport Vehicle Blue Book, the Retail Sales Tax is due on the declared purchase price which should be supported by a Bill of Sale or similar document, if the vehicle was acquired through a purchase. If the vehicle was acquired by means other than a purchase, the tax is due on the declared fair value.

The purchase price or declared fair value on which the tax is paid is subject to review by the Provincial Tax Commissioner. If this review determines that the declared purchase price or declared fair value is less than the actual fair value, an assessment for additional RST and interest may be levied by the Commissioner.

In what circumstances would I submit a written appraisal of the vehicle?

If the purchaser feels the Canadian Red Book value or the Canadian Sport Vehicle Blue Book value does not reflect the actual fair value of the vehicle they may substitute a written appraisal for the prescribed trade book value, at their own expense.

Who is authorized to do vehicle appraisals and how is the appraisal used?

The following persons are authorized to make a written appraisal of the value of a motor vehicle:

  1. A motor vehicle dealer who has a Class A or Class D license issued under the Dealer’s Trade License Regulations; or
  2. An appraiser authorized by the Commissioner.

The following persons are authorized to make a written appraisal of the value of an all terrain vehicle or snow vehicle:

  1. A sport vehicle dealer who has a Class E license issued under the Dealer’s Trade License Regulations; or
  2. An appraiser authorized by the Commissioner.

Retail Sales Tax is paid on the greater of the appraised value or purchase price or declared fair value. The appraised value will be recognized for Retail Sales Tax purposes only if the appraisal is dated within 90 days of the date of purchase.

An appraised value on which the Retail Sales Tax is paid is subject to review by the Commissioner. If this review determines that the appraised value is less than the actual value, an assessment for additional Retail Sales Tax and interest may be levied by the Commissioner.

Do I pay Retail Sales Tax if I purchase a vehicle in a private sale outside Prince Edward Island and bring the vehicle into Prince Edward Island?

If a person brings a vehicle into the Province and the vehicle is not registered in the person’s name in another jurisdiction, Retail Sales Tax will apply if the vehicle was purchased outside Prince Edward Island from a seller who was not a GST/HST registrant.

If a person brings a vehicle into the Province and the vehicle is registered in the person’s name in another jurisdiction, Retail Sales Tax will apply if:

  1. The vehicle was purchased outside Prince Edward Island from a seller who was not a GST/HST registrant; and
  2. The vehicle does qualify as settler's effects or a family transfer under the Retail Sales Tax Act.

Further information on settler effects and family transfer exemptions can be found in the Retail Sales Tax Exemptions section.

How do I calculate the amount of Retail Sales Tax to be paid on designated property other than a vehicle?

Retail Sales Tax on designated property, other than a vehicle, is calculated on the declared taxable value which generally is the purchase price as shown on the Bill of Sale or similar document plus shipping or delivery charges.

The purchase price or declared fair value on which the tax is paid is subject to review by the Commissioner. If this review determines that the declared purchase price or declared fair value is less than the actual fair value, an assessment for additional Retail Sales Tax and interest may be levied by the Commissioner.

 

Disclaimer: This page 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 page and the statutes, the statutes shall prevail.
Published date: 
June 16, 2017