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PST Series: Should You Charge MB RST?

PST Series: Should You Charge MB RST?

🇨🇦 PST Series: Should You Charge MB RST? 🤔

June 14, 2024

Do You Need To Charge Manitoba (MB) PST On Your Sales?

We had previously covered high-level guidance on GST/HST in this post and BC PST in this post.

Requirement to register for and collect MB PST (officially referred to by Manitoba as Retail Sales Tax (RST)) can apply to businesses, whether they are based in MB or not. Here's a concise guide with the basics.

Should your business be registered for the MB RST?

Your business is required to be registered for sales tax if:

you carry on business in Manitoba, selling taxable goods or services at retail
you are a manufacturer, wholesaler, or importer in Manitoba (directly or through an agent)
you bring into or receive in Manitoba, taxable goods for use by your business
you are an out-of-province business that solicits and sells goods in Manitoba
you are a mechanical or electrical (M&E) contractor performing work in Manitoba
you operate a retail business in Manitoba on a temporary, short-term or intermittent basis

You are not required to be registered for sales tax if:

your business sells only non-taxable goods or services
you are a contractor (except an M&E contractor) who only supplies and installs goods into real property and you buy all goods from sellers registered for Manitoba retail sales tax
your business’s annual taxable sales volume is under $30,000, and you buy all goods from sellers registered for Manitoba retail sales tax.

In order to be qualified as a ‘small seller’ and be exempt from collecting MB RST, the following conditions apply:

pay Manitoba RST on all taxable goods and services purchased for your own use;
pay Manitoba RST on all taxable goods and services purchased for resale, including goods and services purchased to produce other goods for sale;
keep records of your sales; and
sales invoices must indicate that RST is included in the price. RST mustnot be itemized on the invoice.

The Gist

The gist of everything above is that, for practical purposes, Manitoba’s threshold is essentially Nil if all your goods and services purchased for resale are purchased outside Manitoba.

Services

Taxable Services:

Short-term accommodations of less than one month
Accommodations purchased through an online sales platform
Telephone and other telecommunications services
Streaming services and media purchases
Printing and related services
Photography and related services
Repairs and maintenance services for taxable products
Accounting, architectural, legal, engineering, security and private investigation services (each of these have their own specific rules)

Tax Exempt Services:

Services to real property (real estate) - e.g. inspections, construction labour, janitorial services, painting or washing of walls);
Personal services - e.g. medical, hair, skin, nail, spa and bodymodification services
Day care services
Education
Advice or consulting of a general nature
…and a few more (refer to resources linked below)

Online Marketplace Sellers (E-Commerce)

If you are an e-commerce seller, who sells on an online marketplace like Amazon, then you should note:

MB has mandated E-Commerce platforms, like Amazon, to register for and charge MB RST on sale of goods, even if the Seller (i.e. your business) is not registered for MB RST.
Amazon would do this charge and remittance as Amazon, not on behalf of your business.
So, if your only source of MB income is selling online through Amazon, for e.g., you could potentially skip registering for MB RST.
However, if you also have taxable sales to MB through other avenues, for e.g. direct wholesale, or through your Shopify website (Shopify is not an online marketplace), then you would still be required to register, charge and remit MB RST if you meet all the prerequisites.

Online Accommodation platforms like AirBnB would work the same way as above.

How To Register For MB RST

Before you start charging MB RST (or any GST/PST for that matter), you need to register for it.

You can register for MB RST using any of the following options:

Online: register using TAXcess
Print and mail: this fillable form.

Resources

As you can see, these rules get complex, and outside of the most simple scenarios, need to be assessed and analyzed on a case-by-case basis.

For more detailed guidance on MB RST, refer to the resources linked above.

If you need help with your MB RST assessment, reach out to our team!

In an upcoming post, we'll delve into Provincial Sales Tax (PST) rules for other Provinces of Canada.

✌️

Think Team