Month-end close: Retail Sales Tax in Manitoba

Manitoba's RST is 7% on the selling price before GST, filed on its own return with Manitoba Finance and due by 4:30 p.m. on the 20th.

This is part of the sales tax checklist. Manitoba charges its own Retail Sales Tax (RST) on top of GST. It is filed with Manitoba Finance, and the GST steps are on the Canada page.

Rate. 7% Retail Sales Tax (RST), calculated on the selling price before GST.

Filing. The average RST collectable per month sets it: $5,000 or more is monthly, $500 to $4,999 is quarterly, and under $500 is annual. Monthly returns must be filed online in TAXcess.

Due. By 4:30 p.m. on the 20th of the month after the period, or the next working day if the 20th is a weekend or statutory holiday. Annual returns are due January 20.

The trap. The $30,000 registration exception does not cover a business that buys from out-of-province suppliers that don't collect Manitoba RST, or one that sells tobacco or liquor. A late return or payment costs 10% of the tax.

The month-end steps

1. Check registration. A vendor that sells taxable goods and services must register with Manitoba Finance and collect RST. A small business with annual taxable sales under $30,000 is not required to register or collect RST. It pays RST on its own purchases, and its invoices say that RST is included in the price without itemizing it. The exception does not cover a business that uses out-of-province suppliers that do not collect Manitoba RST, a business that sells tobacco or liquor products, or an out-of-province business that has not paid Manitoba RST on goods and services bought for resale in Manitoba. Those businesses must register to collect and remit the tax [1]. Done when each client either holds an RST number or has been checked against the $30,000 line and those exclusions.
2. Confirm what's taxable. RST applies to the retail sale or rental of most goods and certain services. Bulletin No. 030, Summary of Taxable and Exempt Goods and Services, lists them [1]. Done when each kind of sale the client makes has been checked against it.
3. Check the rate and the invoices. The rate is 7%, calculated on the selling price before GST. Each invoice must show the sale price of each item and the total RST payable [1]. Done when each taxable sale carries 7% of its pre-GST price.
4. Check purchases from outside Manitoba. A vendor that carries on business in Manitoba and brings in tangible personal property bought outside the province, with a fair value of $800 or more, in each of two or more months of the same calendar year, must register and pay RST on those purchases itself [1]. Done when the client's out-of-province purchases have been tested against the $800 and two-month line.
5. Find the filing frequency. It follows the average RST collectable per month [1]:

6. Work out the due dates. Returns and payments are due by 4:30 p.m. on the 20th of the month after the period. If the 20th falls on a weekend or statutory holiday, the due date is the next working day. Annual returns cover the calendar year and are due January 20 [1]. Done when each return's due date is on the client's calendar.
7. Know what late costs. A taxpayer that does not pay or remit tax by the due date is liable for a penalty of 10% of the tax that was not paid [2]. A late-filed return is subject to a penalty of 10% of the tax payable [3]. Done when each return and payment went in by its due date, or the late ones are flagged for the client.
8. Tie the liability. Done when the RST payable account is at zero after the month's payment, or equals the tax not yet due.