Manitoba retail sales tax rules extend to online sales and streaming platforms


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On December 1, 2021, new rules came into effect, expanding the requirements for businesses to register and collect Manitoba retail sales tax (RST). The expanded requirements were previously announced in the province’s 2021 budget and track similar changes made by several other jurisdictions, including Quebec, Saskatchewan, British Columbia and the federal government. As of December 2021, Manitoba has also published Newsletter no. 064 [PDF] (the Bulletin) which contains new administrative guidance on RST changes for streaming services and online platforms in Manitoba.

Online sales and hosting platforms

Similar to changes in other jurisdictions, the new rules generally require people operating “online sales platforms” or “online hosting platforms” to register for a Manitoba RST number. An “online sales platform” for this purpose generally means an online marketplace that facilitates the retailing of tangible personal property in Manitoba and the collection of payments on behalf of an “online seller”. An “online accommodation platform” generally refers to an online marketplace that facilitates the retail sale of accommodation in Manitoba and the collection of payments on behalf of the person providing the accommodation.

Unlike the legislation underlying similar changes in Saskatchewan, the new Manitoba legislation appears to anticipate a technical problem when a registered online seller makes supplies through an online sales platform. To avoid two people being required to collect and remit the same tax, Manitoba law includes a specific provision that when a seller has remitted the tax payable on a transaction, no other seller is required to remit the tax or to file a declaration in respect of the transaction.

Although the legislation does not appear to indicate that the primary obligation rests with the online seller or the person who operates the online shopping platform, the Bulletin suggests that Manitoba considers the operator of the online shopping platform to be. Online selling is primarily responsible for collecting and remitting RST, regardless of whether the online seller is registered. Consistent with this position, the Bulletin states that if the platform operator collects and remits tax in respect of a sale, the online seller has no RST obligation in respect of that sale. The Bulletin does not make a similar statement that the operator of the online sales platform has no RST obligation with respect to a sale where the online seller pays RST, although this also appears to be the case on the basis of the legislation.

The same principles set out above seem to apply to online hosting platforms, with the Bulletin indicating that the operator of the online hosting platform is responsible for collecting and remitting RST, that the seller is responsible for collecting and paying RST. line either registered or not.

Neither the legislation nor the Bulletin appear to contemplate a due diligence defense where the platform operator or online seller tells the other that they take responsibility for collecting and remitting RST but does, it doesn’t. This factor must be taken into account when the parties are negotiating who should pay the Applicable Taxes.

Streaming services

The new legislation also “clarifies” (according to the explanatory notes) that streaming services are taxable telecommunications services. More specifically, the new legislation expands the definition of “telecommunications service” to include a right, whether or not exercised, to download, view or access any audio program, music, ringtone or television program, film or video. other video using an electronic device. The Bulletin notes that an “electronic device” for this purpose includes computers, cell phones, smartphones, tablets, portable media players, and television or automobile-based media receivers.

The new changes have many nuances and widen the scope of the RST. Companies should therefore be aware of the new legislation and seek legal advice where necessary to ensure that they comply with their obligations.

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