Some Manitoba Retail Sales Tax Facts

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Since April 2007 .. crafters, hobbyists, and other non-commercial home businesses with gross annual sales of less than $10,000 .. is not required to register to collect Manitoba Retail Sales Tax. This means that people would not be using their PST number for purchases of products for resale, nor would they collect sales tax on the sales of their products.

Other than that .. it’s been pretty harsh and a strict road for Manitobans to keep compliant with the Manitoba Retail Sales Tax branch. The Goods and Services Tax Rate has decreased from 7% down to 5% in 2008, but there does not seem to be any reduction planned for Manitoba retail sales tax rates.

Here are a few tidbits about Manitoba Retail Sales Tax .. “R.S.T” as the government likes to call it .. or “P.S.T.” (provincial sales tax) as I like to call it .. that might be of interest. You probably know this already if you are registered to collect PST, and if you are not from Manitoba .. well, you might want to click NEXT!

Here are a few P.S.T. facts

* You have to charge 7% and collect sales tax on your sales in Manitoba.
* The money you collect is trust monies – you are collecting money on behalf of the Government of Manitoba
* P.S.T. returns must be filed and amounts collected remitted by the 20th of the following month, in most cases.
* If the 20th of the month falls on a weekend, due date is extended to the next business day (since Feb/2008)
* You also have to pay what you collected by the 20th of the following month
* When paying the P.S.T. amounts on time, you are entitled to deduct a commission.
* If the tax collected is less than $3.00, then the total commission is equal to the amount you collect.
* If the tax collected is between $3.00 and $20.00, the commission is $3.00
* If the tax collected is over $20.00 the commission is calculated as 15% of the first $200.00 of the tax collected, but 1% of the excess.
* If the tax collected is over $3,000.00 there is no commission eligible.
* If you file your P.S.T. return on time, but do not pay, you are not eligible to collect a commission, and will be charged 10% interest on the balance outstanding.
* If you do not file your P.S.T. return on time, you will be penalized 10% of the balance collected, plus charged 10% interest on the balance outstanding.
* If you do not file your P.S.T. return on time, after 30 days the Manitoba Government can “Auto-Assess” you and estimate your P.S.T. collections. Your penalty is deemed to be 10% of the balance collected, for the first time. The second time that you are auto-assessed .. you will be penalized 25% of the balance collected. For the third time and subsequent times that you are auto-assessed you will be penalized 50% of the tax collected.
* I believe after two consecutive auto-assessments, the P.S.T. department will probably just initiate proceeds to not only estimate a high figure of collections, but will provide a demand for payment to your bank account and might provide a little inconvenience to the non-compliant entity.

HINT: It pays to file your PST return on time, even if you do not pay it in full (but, you should because .. it’s NOT your money – it’s trust money). And, if you don’t file it on time .. at least file it within 30 days from the due date, because you do not want to get automatically assessed and charged that hefty penalty.

The best advice is .. File your P.S.T. return on time .. and take the earned commissions and pay it in full

BE COMPLIANT!

SOURCE: Tax Administration and Miscellaneous Taxes Act [section 39]
SOURCE: Manitoba Taxation – Bulletins

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