The Manitoba retail sales tax is a 7% provincial tax on most goods and many services purchased, leased, or brought into the province for use rather than resale.1Government of Manitoba. Retail Sales Tax It sits on top of the 5% federal Goods and Services Tax, so Manitoba shoppers pay both taxes on most purchases rather than a single blended rate.2Canada.ca. GST/HST Calculator and Rates Sellers collect the tax for the province and remit it to Manitoba Finance on a set schedule.
What the 7% Applies To
The tax covers tangible personal property, which the Act defines broadly as anything that can be seen, weighed, measured, felt, or touched. That takes in the vast majority of physical goods you buy or lease. Rental charges for temporarily using someone else’s property are taxed at the same 7% rate as an outright purchase.3Government of Manitoba. Rental of Machinery and Equipment
The 7% rate also reaches a range of services. Telephone and other telecommunications services are taxable when they begin or end in Manitoba, or are billed to a Manitoba phone number. Streaming services and digital media purchases fall under the tax, including music, podcasts, video, and ringtones accessed through electronic devices.4Government of Manitoba. Summary of Taxable and Exempt Goods and Services
Certain insurance contracts attract RST too. Property insurance, group life insurance, creditor insurance, accidental death and dismemberment coverage, disability, and critical illness policies are all taxable. Group contracts covering health care costs are specifically excluded.5Government of Manitoba. The Retail Sales Tax Act – Insurance Pet insurance, boiler and machinery coverage, and theft insurance are taxable as well. Different components of the same benefits package can carry different tax treatment, which matters for employers running group plans.
How RST Stacks with the Federal GST
Manitoba keeps its provincial tax separate from the federal 5% GST rather than combining them into a Harmonized Sales Tax. A $100 taxable purchase carries $5 in GST plus $7 in RST, for a total tax of $12.2Canada.ca. GST/HST Calculator and Rates The RST is calculated on the pre-GST selling price, so you are not paying provincial tax on top of federal tax.4Government of Manitoba. Summary of Taxable and Exempt Goods and Services
The two taxes are administered separately. GST goes to the Canada Revenue Agency; RST goes to Manitoba Finance. Businesses registered for both file two sets of returns to two agencies. Some items are exempt under one tax but not the other: basic groceries are zero-rated for GST and exempt from RST, but children’s clothing is exempt from RST while still subject to GST.
Key Exemptions
Food and Beverages
Basic groceries sold for human consumption are exempt from RST. Prepared food and beverages sold ready to eat are taxable, along with vending machine items.6Manitoba Finance. Food and Beverages If something is packaged and marketed for immediate consumption, expect it to be taxable.
Children’s Clothing and Footwear
Clothing, footwear, and accessories for children are exempt when priced at $150 or less. Items within standard children’s size ranges qualify automatically. For larger items, the exemption still applies if the child is 14 or under, but the seller must obtain a written certification from the purchaser confirming the item is for a child.4Government of Manitoba. Summary of Taxable and Exempt Goods and Services Used clothing or footwear valued at $100 or less is exempt regardless of who will wear it.
Prescription Drugs and Medical Supplies
Drugs dispensed by a practitioner or filled on prescription are exempt. The exemption extends to insulin, antibiotics, hormones, and other drugs covered under federal pharmaceutical schedules, in some cases even without a prescription.7Government of Manitoba. Drugs, Medical Equipment and Supplies for Human Use Medical equipment designed for people with disabilities, artificial limbs, hearing aids, orthopaedic appliances, and diabetic supplies like blood glucose monitors and insulin pumps are exempt without a prescription. Dental and optical appliances require one.
Farm Equipment and Agricultural Supplies
Farm implements, machinery, and their repair parts are exempt when used principally for farming. Manitoba defines “principally” as at least 80% farming use during the 24 months after purchase.8Government of Manitoba. Farm-Use Equipment and Other Items Tractors and attachments qualify, along with fertilizers, seeds, binder twine, and granaries. Agricultural feeds, livestock, and plants that produce food for humans are also exempt.4Government of Manitoba. Summary of Taxable and Exempt Goods and Services The 80% threshold is the point most often disputed on audit, so keep usage logs from day one.
Manufacturing Inputs
Manufacturing has no blanket equipment exemption. Specific inputs used directly in production are exempt, including catalysts, dies, jigs, moulds, patterns, and “direct agents” defined in the regulations. Welding tips and laser or plasma nozzles used to produce goods for sale also qualify.4Government of Manitoba. Summary of Taxable and Exempt Goods and Services Electricity used directly to operate machinery in manufacturing or mining is taxable at a reduced 1.4% rate. General equipment and tools remain taxable at 7%.
Home Heating and Residential Electricity
Electricity used solely to heat a dwelling where you live is exempt, as is natural gas delivered by pipeline for the same purpose. The exemption covers electricity and gas used to heat or cool farm buildings and to dry grain.4Government of Manitoba. Summary of Taxable and Exempt Goods and Services Biomass fuel products made entirely from wood, wheat, flax, or similar crops are exempt when purchased for heating, cooking, or generating electricity.
When a Business Must Register
Any business selling taxable goods or services in Manitoba needs a vendor’s licence from Manitoba Finance. Businesses with annual taxable sales under $30,000 are not required to register or collect RST.9Government of Manitoba. Information for Vendors Once your sales cross that threshold, you must register before you start collecting tax. Registration is handled through TAXcess, Manitoba’s online portal, which is also where you file returns and make payments.10Government of Manitoba. Online Services – Residents Portal
Out-of-province sellers must register and collect RST if they deliver taxable goods into Manitoba, solicit orders from Manitoba customers by any means, and accept those orders. Holding inventory in Manitoba for sale to local customers also triggers the registration requirement.9Government of Manitoba. Information for Vendors Sellers dealing only in non-taxable goods, or selling exclusively to buyers purchasing for resale, do not need to register.
Vendors who carry on business in Manitoba and bring in taxable property purchased elsewhere with a fair value of $800 or more, in two or more months of the same calendar year, must also register and self-assess RST on those purchases.9Government of Manitoba. Information for Vendors
Filing Frequency and Remittance
How often you file depends on the average RST you collect each month:
- Monthly filing if you collect $5,000 or more per month on average.
- Quarterly filing if you collect $500 to $4,999 per month on average.
- Annual filing if you collect less than $500 per month on average.
Manitoba Finance assigns your filing frequency when you register, based on your estimated sales.9Government of Manitoba. Information for Vendors Returns received after 4:30 p.m. on the due date are considered late. All filing and payment is expected through TAXcess.
Penalties and Interest
The basic penalty for failing to remit tax on time is 10% of the amount owed. Where the failure results from neglect or carelessness, the penalty can reach 100% of the unpaid tax.11Government of Manitoba. The Tax Administration and Miscellaneous Taxes Act Failing to file or pay through TAXcess when required carries separate penalties: $100 for the first occurrence and $250 for each subsequent failure.
Outstanding balances also accrue interest, compounded monthly, at a rate set twice a year on January 1 and July 1. For the first half of 2026, the rate is 7.20%.12Government of Manitoba. Interest Rates
Failure to file returns or provide required information is a provincial offence. An individual convicted for the first time faces a fine between $300 and $5,000, up to three months’ imprisonment, or both. Corporations face fines up to $10,000 on a first offence and $20,000 on a second.11Government of Manitoba. The Tax Administration and Miscellaneous Taxes Act Criminal prosecutions are rare, but they explain why staying current matters even when cash is tight.
Records You Have to Keep
Every registered vendor must maintain books of account, records, and documents showing all purchases, sales, inventory counts, RST collected, RST self-assessed on out-of-province purchases, discounts, refunds, and bad debts. Insurance-related records showing premiums charged and collected are also required.13Government of Manitoba. Record Keeping and Retention Requirements
Keep these records for the current fiscal year plus the six preceding years. General ledgers must be retained indefinitely. Records for any year where tax amounts are outstanding or in dispute, or where the Taxation Division has requested retention, cannot be destroyed regardless of age.13Government of Manitoba. Record Keeping and Retention Requirements All records must be kept in Manitoba and made available for audit in the province.
Buying or Selling a Business
When someone buys the assets of a Manitoba business, a Bulk Sale Clearance Certificate protects the buyer from inheriting the seller’s unpaid tax debts. Under section 45 of The Tax Administration and Miscellaneous Taxes Act, the seller applies for this certificate, which confirms the Taxation Division has no security interest in the assets being sold as of the sale date.14Government of Manitoba. Bulk Sales – Buying and Selling Business Assets
The Taxation Division issues the certificate only when all required returns under seven provincial tax statutes have been filed and paid, or the seller has made satisfactory payment arrangements. The application carries a $50 processing fee and must be completed by the seller or an authorized legal representative.14Government of Manitoba. Bulk Sales – Buying and Selling Business Assets The requirement applies even to businesses that were never registered with the Taxation Division. An account status letter or contractor clearance letter is not a substitute. Buyers who skip this step can find themselves paying someone else’s back taxes after the deal closes.