What is the provincial sales tax in Manitoba?
In Canada, there is a federal sales tax called the Goods and Services Tax (GST). Most provinces have combined their federal sales tax with their provincial sales tax to only charge one tax called the Harmonized Sales Tax (HST). However, there are some provinces that still have provincial sales tax: British Columbia, Saskatchewan, Manitoba and Québec.
In Manitoba, the provincial sales tax is called the Retail Sales Tax (RST). The Manitoba RST has different rules from the GST/HST. Generally, the GST/HST is charged and collected on most products and services (see FAQ Taxable, Zero-Rated and Exempt Supplies for further information) and when GST/HST is paid it can be claimed back on your GST/HST return. RST is generally charged when a sale or rental of most goods and certain services are obtained for personal or business use in Manitoba. However, RST is not charged on sales made to registered vendors in Manitoba for the purpose of resale if the vendor provides the seller with their RST number. The Manitoba RST rate is 7%.
Unlike GST/HST, if you pay RST you cannot claim it back and offset it against RST collected. Instead, the RST paid becomes part of the expense paid. You may be eligible for a small commission (up to $58) to reduce the amount of RST owing. The amount of commission is calculated on your Manitoba RST return.
There are various criteria by which a business is required to register for RST in Manitoba. The criteria are different depending on if a business is located inside or outside of Manitoba.
For businesses located in Manitoba, they are required to register for RST when their annual taxable sales exceed $10,000.
For businesses located outside of Manitoba, they are required to register for RST if they sell or lease taxable goods to purchasers located in Manitoba and if either:
- The seller:
- delivers the goods in Manitoba,
- solicits persons in Manitoba for orders (i.e. in person, by telephone, mail, e-mail, fax, posters, television or newspaper advertisement), and
- accepts orders originating in Manitoba to purchase goods (i.e. by telephone, internet, e-mail, fax, letter, etc.). or
- The seller holds an inventory of taxable goods in Manitoba.
Businesses located outside of Manitoba are not required to register for RST if they only sell goods that are being purchased for resale by vendors.
If you would like more information on this topic, please contact a member of the EPR tax team by completing the contact form below. Our tax experts can advise on the best structure to reduce or minimize the impact of the taxes.
Canadian and foreign tax laws are complex and have a tendency to change on a frequent basis. As such, the content published above is believed to be accurate as of the date of this post. Before implementing any tax planning, please seek professional advice from a qualified tax professional. EPR Maple Ridge Langley, Chartered Professional Accountants will not accept any liability for any tax ramifications that may result from acting based on the information contained above.