In Canada, sales tax is charged on almost everything you buy. The final price you pay at checkout will be higher than the price tag on the item on the shelf or the service listed on a price list.
In PEI you may have to pay Harmonized Sales Tax (HST) of 15% when you buy products and services. For example, if you are buying something that has a price tag of $100, and it is a taxable item, you will pay $115 at checkout.
Sales Tax Exemptions
Some items are exempt from the provincial portion of the HST, and for some, there are no taxes charged at all. This means that for some things you have to pay the federal Goods and Services Tax (GST) of 5%, and for some you do not have to pay the sales tax.
Some items on which no sales tax is charged are:
- basic grocery items like milk, eggs, rice, etc.
- prescription drugs
There are some services that are completely tax-exempt as well, like residential rent, municipal water, municipal public transit, some air travel, car insurance, health and dental care, music lessons, daycare services, and legal aid services.