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Explain the sales tax on vehicle purchases in SK?
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Explain the sales tax on vehicle purchases in SK?

In Saskatchewan, the sales tax on vehicle purchases is comprised of two distinct components: the 5% federal Goods and Services Tax (GST) and the 6% provincial Sales Tax (PST), resulting in a combined 11% tax on most transactions. The 5% GST is a federal tax applied uniformly across Canada on the gross purchase price of the vehicle, whether it is new or used, and is collected by dealerships.

The 6% Saskatchewan PST, however, has a significant provincial nuance that benefits consumers: it is calculated on the net purchase price *after* any trade-in allowance has been deducted from the vehicle's selling price. This means that while GST is applied to the full price before trade-in, PST is applied to the reduced amount, directly lowering the provincial tax burden for buyers who trade in a vehicle. For private vehicle sales in Saskatchewan, PST is generally still applicable and collected by Saskatchewan Government Insurance (SGI) during the registration process, whereas GST typically does not apply unless the seller is a GST registrant. Understanding these specific tax calculations is paramount for Canadian consumers, as these taxes considerably increase the total cost of vehicle ownership and directly influence budgeting, financing needs, and the overall affordability of your chosen vehicle.

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