Manitoba Sales Tax (GST & RST): Complete Compliance Guide

Is the tax rate in Manitoba 5% or 7%? It’s actually both, and that’s the problem. 

Many businesses miss the memo when it comes to dealing with indirect tax in Manitoba. In the province, qualifying businesses with sales tax responsibility must charge both Canada’s goods and services tax (GST) rate of 5% and the local Manitoba provincial retail sales tax (RST) of 7%. This means that businesses who sell into Manitoba, even if you aren’t located there, will generally need to charge 12% tax on transactions. And yes, this tax even applies to nonresidents.

Even if they understand and comply with Canadian GST, many small and mid-sized software businesses are unaware of the additional RST obligation. After all, it's easy to sell SaaS, AI, or digital products to anyone in the world. But monitoring your Manitoba sales and registering for RST when you hit the threshold is vital to prevent fines, penalties, and risk to your business as it grows and scales. 

Manitoba Sales Tax: Quick Overview

Manitoba’s sales tax is a dual system that requires businesses charge 12% total sales tax: 7% provincial Retail Sales Tax (RST) plus 5% federal Goods and Services Tax (GST). Vendors, including SaaS and digital sellers, must register for and collect both taxes.

Note that some provinces abbreviate their provincial sales tax as PST, but in Manitoba it’s generally referred to as retail sales tax or RST.

Manitoba’s Dual Tax System (GST & RST)

What is RST and GST?

Manitoba’s retail sales tax (RST) is an indirect tax charged by the seller to the buyer at the point of sale. It applies to retail sales of tangible goods, some services, including software as a service and digital goods. It is managed by Manitoba Finance.

GST is Canada’s national retail tax. It applies to both goods and services across Canada. It is managed by Canada’s national Canada Revenue Agency (CRA).

Sellers who collect these taxes must file and remit each portion of the collected tax to the respective agencies. I.e. It isn’t permissible to remit all 12% of tax collected on a sale just to the CRA or just to Manitoba Finance.

The main difference in these two taxes is how they are charged. Manitoba’s RST is only charged at the final B2C point of sale to the customer, much like US sales tax. But GST is charged on most sales, whether they are a B2B sale of supplies or a B2C sale. 

Further, businesses can claim credits on GST they pay on goods they later resale, while that option isn’t available for RST.

What is taxable in Manitoba?

Most goods and services are taxable in Manitoba, either under the RST system, the GST system, and often under both. Items taxable under both systems include clothing, electronics, furniture and appliances. Services are generally only subject to GST but not RST.

Typical Manitoba tax exemptions include:

• Items for resale
• Custom software
• Some children’s clothing
• Medical devices
• First Nations purchase on reserves

Note that currently, SaaS and software is only taxable if it is downloaded to a local Manitoba device or accessed via a local server in the province. 

But SaaS, software and digital product sellers should be aware that on 1 January 2026 all software subscriptions, data storage and remote processing will become subject to Manitoba’s RST. Read about Manitoba's software tax update here.

Who Needs to Register for Manitoba RST?

Businesses based in or selling to customers in Manitoba are generally required to register for RST. This includes:

• Business with physical presence in Manitoba – An office, employees or contractors, inventory, etc. who makes more than $30,000 CAD in taxable annual sales in the province
• Nonresidents who sell physical products into the province
• SaaS/digital vendors selling into Manitoba - Even if they have no physical presence, SaaS or digital goods sellers must register for Manitoba RST when making their first sale

Note that rules for who needs to register for Manitoba’s RST vary from who needs to register for Canada’s national GST.

Manitoba Sales Tax Rates & Key Rules

SaaS and digital goods sellers into Manitoba take note. After 1 January 2026 the tax on SaaS and digital goods will be the combined 7% RST rate + 5% GST rate for a total of 12% tax on purchases.

How Will the 2026 RST Changes Impact SaaS & Digital Goods?

Currently, digital products and software are only subject to Manitoba’s 7% RST if they are downloaded onto devices or accessed from local servers in Manitoba. 

But starting on 1 Jan 2026, all cloud software, data storage, and SaaS subscriptions will be taxable, even if only accessed remotely. 

For example, a US-based SaaS seller who currently sells into Manitoba, but only allows access to their SaaS product remotely on their US-based server, isn’t currently required to collect the Manitoba RST. But as of 1 Jan 2026, any sale of SaaS to a user in Manitoba will be subject to the 7% RST.

Software businesses should begin monitoring their sales into Manitoba to prepare to begin collecting RST in January 2026.

Registration & Compliance Steps

How to Register for GST with the CRA

Note that SaaS and digital goods sellers not based in Canada are required to register under the simplified GST/Harmonized Sales Tax (HST) registration for digital economy businesses. 

To register your business to collect Canadian GST: 

1. Register for a Business Number (BN) with the CRA
2. Once you’ve obtained your BN, register for GST at the Business Registration Online (BRO) portal. You’ll be walked through a registration process and asked to provide the following:
   
   1. Company identifying info
   2. Date of first sale into Canada
   3. Business type
3. You’ll typically receive your GST registration within a few business days

Learn more about registering in Canada with our [Canada blog post.]

How to Register for Manitoba RST

To register for Manitoba RST you must already be registered for Canada's nationwide GST/HST.

Once you have that registration infraction, go to TAXcess Manitoba to obtain your RST registration.

You’ll be required to provide:

• Tax reference number
• Articles of incorporation
• Contact information
• Registration date/date of first sale into Manitoba

Always be sure that you are registered and in good standing before collecting GST or RST from your Manitoban customers. 

B2B vs. B2C: Charging Tax Correctly 

When to charge the 5% GST, when to charge the 7% RST, and when to charge both combined can be confusing, so here’s a cheat sheet:

• B2C sales – Always charge both taxes to customers, unless the goods (such as medical devices or some childrens’ clothes) are non-taxable either at the Canadian or Manitoban level.
• B2B sales – If a vendor provides a valid RST vendor number, then there is no need to charge RST. However, you should always collect GST unless the vendor provides a valid GST number. In that case, the reverse charge mechanism may apply and your buyer can self-assess the GST due. 
• Services – Services, such as training, are generally taxable under GST but non-taxable under RST

Calculating, Collecting & Filing Manitoba Sales Tax

Calculating & Collecting Manitoba Sales Tax

Calculating Manitoba sales tax becomes straightforward once you understand the dual sales tax system. 

1. Determine if your products or services are subject to tax. If they are not taxable at both the Canada and Manitoba level, don’t charge either tax.
2. Apply the 5% GST + 7% RST if the items are taxable and being sold to end users.
3. If the items are only being sold to other businesses for resale, only apply the 5% GST (and note that the reverse charge mechanism may apply).

For example, a SaaS subscription sold from a US-based SaaS business to a Manitoba subscriber right now would be liable for the 5% GST exempt from RST. But that same subscription sold after 1 Jan 2026 would be subject to both the 5% GST and the 7% RST.

Filing & Remitting Manitoba Sales Tax

Once you’ve collected the tax, you must determine how much RST and GST you’ve collected, and then remit the funds to the respective tax authorities. RST goes to Manitoba Finance and GST goes to the CRA.

Filing GST Returns with the CRA

You’ll file monthly, quarterly, or annually. The higher your business’s revenue, the more often you’ll be required to file. Remit tax collected at the same time as filing.

Filing RST Returns on TaxAccess

Manitoba RST returns are filed through the TAXcess Manitoba portal. Your filing frequency depends on your sales volume:

• Monthly – If you collect more than $3,000 RST annually
• Quarterly – If you collect less than $3,000 RST annually

RST returns are due by the 20th of the month following the end of your reporting period. Remit tax collected at the same time as filing. 

Penalties and Interest

Be sure to file and pay on time to avoid penalties and late fees. The CRA charges 5% of unpaid GST plus 1% per month, while Manitoba charges 10% of unpaid RST plus 2% per month. Note that Manitoba recently eliminated the small vendor commission that used to help offset compliance costs, so there's no financial incentive to delay compliance.

Expand Across Canada with Confidence with Sphere

Manitoba's dual tax system is just one example of the complex, province-by-province rules that SaaS and digital businesses face when expanding across Canada. And let's be honest, if you're running a growing software company, your finance team is probably already stretched thin.

That's where Sphere comes in. Sphere provides comprehensive coverage and automation for tax compliance across every Canadian province. Our AI-powered platform monitors your sales thresholds, handles registration steps, and manages filing deadlines so your team can focus on what really matters: growing your business.

Plus, our AI-backed tax compliance research monitors for tax changes, such as Manitoba’s impending SaaS tax change, and ensures your business stays up to date with tax rules and laws, no matter where in the world you sell.

Whether you're just making your first sale into Manitoba or you're scaling across multiple provinces, Sphere ensures you stay compliant without the manual work that has plagued growing companies for years.