Manitoba has a Provincial Sales Tax (PST) that applies to the sale of most goods sold or purchased in Manitoba. The PST also applies to some services within Manitoba. Manitoba PST is sometimes known as RST or Retail Sales Tax. Manitoba’s RST is a flat seven percent tax that is based on the sale price of the good or service before the federal Goods and Services Tax (GST) is applied. Vendors who sell taxable goods must usually register with the Taxation Division and collect RST on their sales. However, not every business must register. Jeremy Scott Law assists companies in registering and keeping up with their tax obligations in Manitoba and beyond. Our experienced legal team can answer your questions about Manitoba PST registration when you schedule a consultation by calling (602) 403-7201.
Basic Rules Regarding Manitoba PST Registration Requirements
Any entity carrying out business activities in Manitoba must have a valid RST number issued under the Retail Sales Tax Act before making any taxable sales. In general, if a company engages in business in Manitoba for at least two months in the same calendar year, it is required to register with the Taxation Division and self-assess RST on purchases.
There is an exception to this requirement for businesses that have annual taxable sales of less than $10,000. This exception does not mean that the business avoids paying the RST, however. Instead, the business is simply allowed to avoid registration and does not have to charge RST on the price of its goods and services. They must still pay RST on the sale price of their goods and services.
What Is an RST Registration Number?
The RST registration number is a seven-digit number that companies provide to their vendors when they purchase supplies. This number is also necessary to request that any supplies be exempt from RST. Companies must be able to produce their RST when requested, and in some cases, it may be necessary to put a company’s RST number on any invoices for the sale of goods or services.
How Do I Know if My Business Needs to Register for Manitoba Retail Sales Tax?
Most businesses that sell goods in or to entities or individuals in Manitoba will need an RST number. Even out-of-providence businesses that sell goods or services to those in Manitoba will need to register for the Retail Sales Tax. In general, there are only three exceptions to the registration requirement.
- The company does not sell any taxable goods or services.
- The annual sales volume of the business is less than $10,000.
- The company is a contractor (not a mechanical or electrical contractor) who only supplies and installs goods into real estate.
For each exception, the company may also need to buy goods and services exclusively from vendors that are registered for Manitoba retail sales tax. Manitoba Finance offers an informational pamphlet businesses can use to determine whether they must register for RST. The same pamphlet discusses other taxes for certain industries that may have additional registration requirements as well.
How Do Businesses Register with the Taxation Division?
Businesses can register with Manitoba’s Taxation Division online by visiting the Manitoba Finance online portal. Companies can also submit a paper registration form. There are no filing fees or charges that apply in the registration process.
When Do Businesses File RST Returns and Remit RST Collected?
Filing frequency requirements vary based on the average amount of RST collected per month. Companies with smaller sales values will file less frequently.
|Average RST Collected Per Month||Timing to File RST Returns and Remit RST Collected|
|$5,000 or more||Monthly|
|$500 to $4,999||Quarterly|
|Less than $500||Annually|
Starting as of January 2021, monthly RST returns must be submitted electronically. The Taxation Division no longer accepts paper filings for monthly tax returns and payments.
Additional FAQs Regarding Manitoba PST
Keeping up with Manitoba RST requirements can be a bit overwhelming, especially for small and new businesses. Jeremy Scott Law may be able to help business owners and managers understand and comply with Manitoba reporting and remittance requirements. Companies can also use this quick FAQ section to further their understanding of Manitoba PST.
How Does a Business Collect RST?
Businesses must state the Manitoba PST separately on the itemized invoice for the sale price of each item. Companies are responsible for assessing and collecting the right amount of RST based on the sale price of the good or service. Buyers cannot refuse to pay RST, but they are not held responsible for calculating the amount they must pay. If the tax is calculated incorrectly, the company is still responsible for submitting the right amount to the Tax Division with their regular reporting and remitting period. That means that if a customer does not pay enough RST, the company will still need to pay the correct amount.
What Items Are Exempt from PST in Manitoba?
Every good is taxed at the RST rate unless it is specifically exempted by law. Examples of items exempt from RST include:
- Baby supplies such as diapers and food
- Certain supplies used for farm use, such as fencing and barbed wire and agricultural feed
- Books published for educational purposes
- Certain children’s clothing and footwear
- Natural gas
- Water (except when sold in single-serving units)
- Basic groceries
- Certain items related to medical care, including many products designed to assist those with disabilities
- Used clothing and furniture
Businesses can review a helpful informational bulletin from Manitoba Finance that lists an array of exempt products. These exemptions are important because if a company only sells exempt items, registration for the Manitoba RST is often not required.
Is Manitoba PST Recoverable?
Manitoba PST is not a recoverable tax. However, businesses can receive a commission for collecting and remitting RST. This commission is 15% of the first $200 of tax collected and 1% of the remaining tax, up to $3,000. The maximum commission permitted per period is $58, and if the RST reported in a period is more than $3,000, no commission is allowed.
Get Help with Manitoba PST
Determining whether a company needs to register for Manitoba RST and remit payments can be confusing. In many cases, it can be even more difficult to determine how to assess RST and appropriately file returns. Jeremy Scott Law regularly assists clients in navigating the complexities of Manitoba PST/RST registration and tax remittance. Learn more about our tax services by calling (902) 403-7201.