News and Insights

Manitoba Information Bulletin Updates

Tax Development Jan 05, 2011

The province of Manitoba has recently revised several information bulletins that explain the application of retail sales tax to various types of supplies made in Manitoba.  Information Bulletin No. 030, “Summary of Taxable and Exempt Goods and Services” provides a summary of both taxable and exempt goods and services, with a focus on the types of goods and services that qualify for exemption under the Retail Sales Tax Act.  The bulletin clarifies that shredded tires purchased directly by a municipality or local government district for its own use are exempt.  In addition, tanning services provided via ultraviolet light emitting devices are taxable services and do not qualify as exempt personal services.  

Information Bulletin No. 005, “Information for Contractors” clarifies that contractors are required to pay RST on any purchase, rental or lease of equipment, including related repairs, and supplies for their own use in supplying and installing tangible personal property in Manitoba.  Goods itemized separately on an invoice to a customer for a supply and install job are considered to be for a contractor’s own use, and tax applies on the purchase to the contractor and not on the sale to the customer.  In addition, where equipment is being leased, RST is payable on the total monthly lease payment for each month or part month the equipment is used or available for use in Manitoba. 

Furthermore, where equipment will be in the province for a temporary period no longer than three years, a contractor must pay tax on 1/36 of the taxable value.  Where equipment remains in the province for a period exceeding three years, the contractor must continue to pay RST on 1/36 of the taxable value.  Businesses may now opt out of the temporary use payments if it becomes apparent that the equipment will remain in the province beyond 36 months.  The business will be required to make a lump sump final tax payment based on a formula as described in the bulletin.  

Information Bulletin No. 034, “Optometrists and Opticians” clarifies that repairs to clip-on sunglasses that have been sold with prescription eyewear for a single price are exempt from retail sales tax.  Accessories, including chains, are taxable when sold separately from prescription eyewear.  

Information Bulletin No. 048, “Rental of Machinery and Equipment” clarifies that delivery charges in respect of the rental of machinery and equipment is not a taxable service if the charge for the delivery is shown separately on the invoice and is in addition to the regular selling price of the equipment, as established by the vendor.  The “regular selling price” is defined as the price normally charged by the vendor for the equipment rental when the customer takes delivery of the equipment at the vendor’s premises.    

Finally, Information Bulletin No. 052, “Tree Nursery and Greenhouse Operations” now includes greenhouse kits and freestanding greenhouses in list “C” of items that are taxable at the time of sale.