The Northwest Territories sales tax picture is the simplest in Canada: there is no territorial sales tax, so the only consumption tax you pay at the register is the federal 5% Goods and Services Tax. That single rate applies across the territory, with no provincial or harmonized component layered on top. Separate territorial levies exist on fuel and tobacco, but everyday retail purchases carry just the 5% GST.
Why the Rate Is Just 5%
The Goods and Services Tax is established under Part IX of the federal Excise Tax Act and applies uniformly at 5%.1Justice Laws Website. Excise Tax Act RSC 1985 c E-15 – Part IX Every retailer selling taxable goods or services collects that 5% and remits it to the Canada Revenue Agency.
This is what separates the Northwest Territories from most of the country. Provinces using a Harmonized Sales Tax bundle a provincial component on top of the federal GST into a single higher rate: Ontario’s HST runs 13%, and most Atlantic provinces charge 15%.2Canada Revenue Agency. GST/HST and Place-of-Supply Rules In the Northwest Territories there is no provincial component, so the total tax on a taxable purchase is 5%.
What You Don’t Pay GST On
Not every purchase attracts the 5%. Federal tax law splits non-taxable items into two categories, zero-rated and exempt. Both result in no GST at checkout, but they work differently for the business selling them. For a shopper, the distinction rarely matters; what matters is the list of what falls outside the tax.
Zero-Rated Supplies
Zero-rated goods are technically taxable, just at a rate of 0%. You pay no GST on them. Common examples:
- Basic groceries such as milk, bread, vegetables, flour, and sugar.3Canada Revenue Agency. Basic Groceries
- Prescription drugs dispensed or prescribed by a medical practitioner for an individual’s personal use, including the pharmacist’s dispensing fee.4Canada Revenue Agency. Drugs and Biologicals
- Certain medical devices, including hearing aids and artificial teeth.5Canada Revenue Agency. Type of Supply
Exempt Supplies
Exempt supplies also carry no GST at the till. Residential rent, many educational services, and most financial services fall into this category.5Canada Revenue Agency. Type of Supply Resale of a home is generally exempt once the property has been lived in as a residence. New construction and substantially renovated homes are taxable, which is where the housing rebate below becomes relevant.
Online, Shipped, and Digital Purchases
If you order from a retailer in Ontario or another province, they do not charge you Ontario’s higher tax rate. Federal place-of-supply rules require vendors to apply the tax rate of the destination, not their own location. Since the Northwest Territories is not an HST-participating jurisdiction, the vendor charges only 5% GST on goods delivered here.2Canada Revenue Agency. GST/HST and Place-of-Supply Rules If a retailer charges more, the transaction has been taxed incorrectly.
The same rule applies to shipped goods, couriered packages, and mailed items. When the delivery address is in the territory, the place of supply is the territory, and only the 5% GST applies.6Canada Revenue Agency. Place of Supply in a Province – Overview
Digital services follow the same 5%. Since July 2021, non-resident companies selling digital products or services to Canadian consumers, including streaming platforms, software subscriptions, and online courses, must register for a simplified GST account and charge the 5% on those sales.7Canada Revenue Agency. GST/HST for Digital-Economy Businesses – Overview A foreign streaming subscription should show 5% GST on the bill.
Separate Levies on Fuel and Tobacco
The territory does not run a general sales tax, but it does tax specific products. These are territorial levies administered by the Government of the Northwest Territories, not part of the GST.
Under the Petroleum Products and Carbon Tax Act, gasoline purchased at a location on the highway system is taxed at 17% of the taxable price per litre, or 6.4 cents per litre where no taxable price is prescribed. Rates differ for off-highway gasoline, diesel for mobile machinery, and aviation fuel.8Government of the Northwest Territories. Petroleum Products and Carbon Tax Act
Tobacco carries a territorial tax of 34.4 cents per cigarette.9Government of the Northwest Territories. Tobacco Tax The 5% GST applies on top of this levy at the point of sale.
The consumer carbon tax is gone. Effective April 1, 2025, the Northwest Territories removed its consumer carbon tax, aligning with federal policy changes. As of 2026, only large industrial emitters, currently the territory’s diamond mines, remain subject to the territorial carbon levy, and regulatory changes provide at-source rebates to all other consumers.10Government of the Northwest Territories. Carbon Tax For most residents and businesses, the carbon tax no longer adds to fuel or heating costs.
Buying a New Home: The GST Housing Rebate
A 5% GST on a new home is a real number, and a federal rebate can return part of it. The GST new housing rebate applies when you buy a newly built home from a builder, build or substantially renovate your own home, or purchase a new mobile or floating home, provided the property will be your primary residence.11Canada Revenue Agency. GST/HST New Housing Rebate
For owner-built homes, the fair market value at completion must be under $450,000 to qualify. The rebate is not available to corporations or partnerships. Homes on leased land qualify if the lease runs at least 20 years or includes an option to buy the land. Specific rebate amounts and phase-out thresholds are set out in the CRA’s Guide RC4028.
When a Business Has to Register for GST
If you sell taxable goods or services in the Northwest Territories, whether you need a GST account depends on your revenue. The small supplier threshold is $30,000 in gross revenue from taxable supplies over any four consecutive calendar quarters. Public service bodies get a higher threshold of $50,000. Below the threshold, registration is not required and you do not collect GST.12Canada Revenue Agency. When to Register for and Start Charging the GST/HST
Once taxable revenue crosses $30,000 within a single quarter or over four consecutive quarters, small supplier status ends and registration is required immediately. From that point you charge GST on every taxable sale, file returns, and remit the net tax. Operating without registration after crossing the threshold can result in back-dated tax liabilities and penalties.13Canada Revenue Agency. Small Suppliers
Businesses under the threshold can register voluntarily. The main advantage is access to input tax credits, which recover the GST paid on business expenses like supplies, equipment, and professional services.14Canada Revenue Agency. Input Tax Credits For a business with heavy taxable inputs, those credits can outweigh the administrative cost of filing returns.