Manitoba has revised (again) Notice RST 13-05, “Retail Sales Tax Rate Change”, with a few important clarifications concerning service and real property contracts:
- Service contracts, including those for accommodation and the supply and installation of tangible personal property, in place before April 17, 2013, are taxable at 7% for services provided up to June 30, 2014. This also applies to holdbacks on contracts executed before April 17, 2013 and completed before June 30, 2014.
- For contracts entered into after April 16, 2013, the rate of tax on any holdback will be based on the rate in effect at the time of the related progress billing.
- Change orders are not grandfathered based on the original contract – tax at 8% will apply to work performed after June 30, 2013, and any services straddling the effective date of the rate change must be segregated into pre and post-July 1, 2013 periods.
- The section on real property contracts has also been updated to provide more details on grandfathered contracts and goods and services related to change orders.