Dine on the dotted line and skip the PST

Finding that provincial sales tax on restaurant meals and snacks tough to swallow? Or maybe it’s the tax on kids’ clothes that has you crying like a baby?

While the extra $15.6 million revenue the province expects to ring up by cutting the tax exemption on children’s clothes was too much for it to resist, the finance minister also blamed “tax leakage.”

Any parent who has changed a diaper knows something about “leakage.” There’s a mess to clean up, and someone’s got to do it. This time, it just happens to be the taxpayer.

In the tax sense, it refers to money slipping out of the province’s reach when grown-ups falsely claim they’re buying that new pair of jeans or shoes for a child.

But what if I told you there’s still a little PST-free oasis?

When those tax changes take effect on April Fool’s Day, you’ll be the one laughing, basking in the prairie sun in Saskatchewan’s own little tax haven.

It doesn’t have the beaches and banks of the Cayman Islands. But it does have a river, oil upgrader, and those mega-sized survey stakes marking the fourth meridian.

Where is this proverbial land of milk and honey, or PST-free Milk Duds and honey crullers? Lloydminster, that unique city straddling PST-free Alberta and carbon-tax-free Saskatchewan.

“It’s an interesting balancing act,” newly minted mayor Gerald Aalbers says. “I almost like to describe it as like the oil; it’s fluid.”

So is its value, thus all Saskatchewan’s tax hikes.

That is, unless you fall under the “Lloydminster Charter,” or what I prefer to call the Lloydminster Loophole. I’m not suggesting it shouldn’t exist. Without it, businesses on the Saskatchewan side of that dotted line would wither and die.

Under a notice issued budget day, Lloydminster businesses were reminded the PST now sits at six per cent and those in Saskatchewan are subject to the same licensing, registration and tax return requirements as any other business in this province.

But here’s that tax nugget for consumers: “With the exception of vehicles, lodging, telecommunication services and electricity for commercial users, businesses are not required to collect PST on sales to individuals or businesses when the goods are shipped to or picked up in Lloydminster, Saskatchewan and are intended for use or consumption within the city limits.”

Just remember though, “vendors are required to collect PST on all taxable goods and services delivered to customers located in Saskatchewan, outside Lloydminster.”

The border city was one of the province’s biggest winners in the last census, growing by 20.4 per cent on the Saskatchewan side.

“I don’t think they’re flocking there to dodge taxes,” Aalbers says.

But who knows what may come with the hike and extension of the PST? The affable mayor admits Lloydminster hasn’t really played up the whole PST tax advantage.

“Maybe we should,” he says, chuckling.

“It’s an interesting place to say the least, especially when it comes to taxation,” he says. “I had to deal with three budgets (two provincial and one federal).”

There’s a lot to consider, not the least of which is where you might want to plunk your money.

The legal drinking age in Alberta is 18, but it’s 19 in Saskatchewan. Aalbers says residents like to celebrate both birthday milestones.

Now, if I buy a pint in a bar on the Saskatchewan side, I won’t pay the province’s Liquor Consumption Tax (which also went up) — levelling the playing field between businesses.

But buy a case of beer at Saskatchewan’s government-owned liquor store and pay the tax. Not so if I take my business to the dozen or so liquor vendors on the Alberta side. So who buys their booze in Saskatchewan?

Interestingly, Aalbers notes the city’s large convention centre is in the land of Wall, not Notley, so that’s where it stocks up. Everyone else?

“I guess the question is, are you going to drive across the city … for $1?”

Speaking of road trips …

If I go on a shopping spree in Lloydminster — filling my car with kids’ clothes, booze and takeout pizzas — then haul it all back to Regina, the government requires me to self-declare my purchases and remit the PST.

There is auditing of businesses, so if the government figures out you loaded up the box of your half-ton with booze for that big family wedding, there could be taxation hell to pay.

As for the smaller stuff, the province admits there’s a certain amount of “tax leakage.”

Even a Wall government can’t plug that hole at the border.