REGINA — The budget introduced by the provincial government features a number of measures that will affect Saskatchewan’s hotels. Overall, the budget expands the tax system by shifting toward consumption taxes and away from income taxes, according to information provided by the Saskatchewan Hotel & Hospitality Association.
The budget increased the provincial sales tax (PST) by one point, from 5% to 6%, effective midnight on March 23. Effective April 1, restaurant meals and other food and beverage items are subject to PST. PST now applies to restaurant meals, snack foods, insurance premiums and construction services: PST taxation on contracts for the repair, renovation or improvement of real property — New contracts entered into on or after April 1 will be subject to PST on the total contract price to the purchaser.
Tourism Saskatchewan’s budget was reduced by $700,000. This includes cuts, of $200,000, to the Events Funding Program and the closing of reception centres across the province.
Lodging in hotels, motels, cabins, cottages, clubs and other similar accommodation for a period of less than 30 days is a taxable service. Tax must be collected on these charges, including fees such as the destination marketing fee.
If lodging is supplied for a continuous period of 30 days or more, tax does not apply to charges for any of the lodging period. Any tax collected during this period should be refunded to the customer. This includes situations where the customer is charged for the required 30-day period or more and the accommodation is occupied by different individuals or left vacant for part of that time.
Lodging supplied for a period of 30 days or more to travel agencies for resale to their customers is subject to tax. Travel agencies are not required to collect tax from their customers, but must pay the tax on the purchase price to the supplier of the lodging.
Also subject to tax are room service, banquet meals and in-house movie services charged to guests.