What the [July 1st] Manitoba PST change means for your practice
/With the upcoming decrease to Manitoba’s PST rate, we thought it was the perfect opportunity for a refresher on how PST applies to naturopaths, acupuncturists, RMTs and other holistic healthcare practitioners.
What’s changing
Effective July 1, 2019, Manitoba is changing its PST percentage from 8% to 7%. Any taxable goods or services sold on or after July 1, 2019 will be taxed at the new rate of 7%.
How PST works
Similar to GST, you’re required to charge PST if the following criteria are met:
You’re registered for PST
The good/service you’re selling is taxable
Registering for PST
You’re generally required to register for PST if you have over $10,000 of taxable sales in a year. If you’re below this threshold, registration is voluntary.
Taxable sales
This is where it gets tricky. Remember that PST has completely different rules from GST, so something that is taxable for GST purposes may not be taxable for PST purposes. You can use the chart below as a handy reference, but you should always check with your accountant for guidance specific to your situation.
What happens when you register for PST?
Once you’re registered for PST, you’re obligated to charge and collect PST on your taxable sales. You’ll also need to file a PST tax return with the government (usually annually).
The benefit is that you’ll be exempt from paying PST on any goods you buy that you intend to re-sell. For example, if you buy 100 bottles of magnesiumto re-sell in your clinic, you won’t have to pay PST on that purchase as long as you’re registered. But you will need to charge and collect PST when you sell those supplements to your patients.
Remember that GST is completely separate, so it’s possible to be registered for PST and not GST, and vice versa.
Questions?
We know this can be confusing. But as the only tax firm in the country that focuses exclusively on holistic healthcare practitioners, we’re experts in tax and this industry. Contact us if you’re looking for some help!