One of the best things about living in Alberta is no Provincial sales tax, especially if you move here from a Province that has PST, it is like everything is on sale all the time! In my blog The Confusing World of Alberta’s Safety Fitness Certificates (SFC), I explained the differences between Federal and Provincial SFC and the additional regulations federally regulated carriers must be aware of in other jurisdictions. Another thing to be aware of is the carrier’s obligation to pay PST to the jurisdiction you are operating in. Disclaimer, I do not work in IRP, IFTA or PST, this information is general information I have learned, for specifics contact your IRP/IFTA tax consultant or British Columbia and Saskatchewan tax office.
PST Charges for Alberta Trucking Companies in British Columbia
Alberta-based trucking companies operating in British Columbia (B.C.), face Provincial Sales Tax (PST) in B.C. due to its specific rules for multijurisdictional vehicles (MJVs). For Alberta trucking companies, understanding how and when PST applies to their fleet is essential for staying compliant and avoiding unexpected tax assessments or audits.
Here’s a breakdown of how PST applies to Alberta-registered trucking companies when operating in B.C., based on information from the Consumer Tax Audit Manual and PST Act.
PST and Multijurisdictional Vehicles (MJVs) in B.C.
When Alberta trucking companies operate in B.C. using multijurisdictional vehicles (MJVs), they become subject to B.C.'s PST on a proportional basis. This proportion is calculated based on the ratio of kilometers traveled in B.C. compared to the total distance traveled in all jurisdictions.
Key Points to Note:
PST Charges for Alberta Trucking Companies in Saskatchewan
As an Alberta trucking company operating in Saskatchewan, understanding your Provincial Sales Tax (PST) obligations is crucial. Saskatchewan requires trucking companies based in Alberta, to pay PST on certain goods and services. Here is what Alberta trucking companies need to know about PST in Saskatchewan.
Understanding the Prorated Vehicle Tax (PVT)
Alberta trucking companies registered for interjurisdictional travel in Saskatchewan are subject to the Prorated Vehicle Tax (PVT). The PVT is designed to proportionally tax vehicles based on the distance they travel in Saskatchewan. If you have an apportioned vehicle registration (cab card) that includes Saskatchewan, you will pay the PVT upon registering your vehicles in the province.
This tax is calculated based on the taxable value of the vehicle, the applicable tax rate, the Saskatchewan distance ratio (the portion of total distance traveled in Saskatchewan), and the remaining months in the registration period. This ensures the tax reflects the vehicle's actual use in the province.
Staying Compliant: Best Practices
Alberta-based trucking companies can minimize the risk of tax complications by following these best practices:
Audit Implications for Alberta Trucking Companies
PST audits are common and are part of broader compliance checks that often include IFTA and IRP audits. A company may be selected for an audit if they’ve not been previously audited or if their tax filings raise red flags (e.g., exceptional mileage or fuel reporting). Trucking companies must be prepared for these audits by keeping thorough and accurate records of their operations, particularly when it comes to distances.
Conclusion
If you are an Alberta trucking company reporting kms to IRP and IFTA but, not paying PST in British Columbia or Saskatchewan you may want to investigate that. It's crucial for Alberta-based trucking companies operating in British Columbia and Saskatchewan to understand and comply with PST obligations in these provinces. Whether it's B.C.'s rules for multijurisdictional vehicles or Saskatchewan's Prorated Vehicle Tax, keeping track of kilometers traveled, properly estimating tax liabilities, and maintaining accurate records is essential for avoiding audits and penalties. By staying informed and prepared, carriers can ensure compliance and minimize the risk of unexpected financial obligations.
When you mix transportation in with economic corridors there is always the risk that safety will not be a priority over the economy. I want to address some critical safety gaps that have been ignored by TEC (Transportation and Economic Corridors) for years. Albertan’s should be deeply troubled by the neglect of crucial safety policies within Compliance and Oversight.
The Compliance and Oversight department monitors the overall safety of trucking companies in Alberta. Compliance and Oversight conducts audits and investigations to ensure compliance with the NSC standards. However, there are glaring issues that demand immediate attention:
1. **Non-Compliance with Intervention and Discipline Policies:** There is a disturbing trend of Compliance and Oversight failing to adhere to its own policies. Companies with significant safety violations are not being labeled as unsatisfactory, allowing them to operate under conditional status without proper intervention. This negligence has been repeatedly highlighted in audits by the Auditor General, yet no corrective actions have been taken.
2. **Flawed Third-Party Auditor (TPA) Program:** The TPA program, responsible for conducting NSC Standard 15 Audits on behalf of the Alberta government, is fundamentally flawed:
- Auditors do not have encryption keys to be able to download complete RODS. This compromised data is used for hours of service reviews, impacting carrier safety and public road safety.
- Lack of support for auditors, hindering their ability to communicate with TEC for assistance.
- Inadequate training and monitoring of auditors, leading to unreliable audit information.
- Inefficiencies in data processing and communication, undermining the accuracy and effectiveness of audits.
If any carrier failed a audit or got a penalty as a result of a audit by a TPA in the last 2 years, I would 100% appeal it. The TPA audits are not accurate because TPA auditors do not have the “key” to unlock the box, that contains the accurate RODS. Would you pay your income tax if you found out the T4’s information has been wrong for years? Pretty simple argument.
To address these urgent safety concerns, the following actions are proposed:
1. Immediate review of all TPA audits and compliance records since June 2022, to ensure accuracy and reliability.
2. Establish a streamlined process for handling TPA audit by providing encryption keys, enhancing transparency and accountability.
3. Enforce intervention and discipline policies rigorously, ensuring that unsafe carriers are marked unsatisfactory and penalized accordingly, promoting road safety and public confidence.
Continuing to ignore these issues and allowing unsafe carriers continued operation is validating the perception that Alberta highways are more dangerous today. Unfortunately, these issues will be ignored until there is another incident involving a Alberta trucking company that Compliance and Oversight deemed safe.
