"What's New in Provincial Commodity Taxes" is a feature exclusive to CCH Canadian Limited's provincial tax reporting services. Prepared by Ryan, Canada's leading commodity tax consulting firm, this feature provides readers with insights into government policies, bulletins, and related documents that are included in your CCH provincial tax service. In your electronic service, click on the link to the document referenced to view it directly, and rely on CCH and Ryan to keep you up-to-date with expert commentary on breaking developments in Canadian commodity taxes. This article first appeared in CCH’s Manitoba and Saskatchewan Tax Reporter No. 429 dated August 2009.

Manitoba

Information Bulletin No. 022, "Sales to Beekeepers"

Manitoba has recently revised this bulletin which outlines the retail sales tax exemptions on farm implements, machinery and other items used "principally for farming" that may be purchased by beekeepers. The bulletin clarifies that where equipment used principally for farming in the 24-month period immediately following acquisition is changed to a non-farm use, no tax applies on the change in use.

In addition, updated lists of conditionally and unconditionally exempt and taxable equipment have been provided.

Information Bulletin TAMTA 001, "Taxation Division Audits"

Manitoba has issued this bulletin to provide taxpayers with information about how a typical audit is conducted by the Taxation Division, which administers several different taxes, including retail sales tax, the health and post-secondary education tax levy, gasoline tax, motive fuel tax, tobacco tax and mining tax. The bulletin explains the fundamentals involved in an audit and provides information on audit selection, audit progression, audit periods, assessments, refunds and appeals.

Information Bulletin No. 012, "Motor Vehicle and Trailer Dealers"

Manitoba has recently revised this bulletin, which is designed to help motor vehicle and trailer dealers understand how retail sales tax applies to the sale or lease of vehicles, parts and repair services, in order to clarify that when a dealer passes on a fee for registering a lien under The Personal Property Security Act, retail sales tax does not apply, subject to certain conditions. Similarly, retail sales tax does not apply to repossession and collection agency charges.

Information Bulletin No. 018, "Farm-Use Equipment and Other Items"

This bulletin, which outlines many of the retail sales tax exemptions available for equipment and other items used principally for farming, was recently updated by the province to remind vendors that a farm-use certificate, with appropriate wording changes, must be obtained to support exemptions for livestock waste treatment chemicals, as well as drugs and medicines for livestock used directly in farming production. In addition, the bulletin's list of conditionally exempt items now includes earthmoving equipment used for clearing or levelling farmland and guidance systems for farm equipment, including GPS units used directly for farm operations. Veterinary services have also been added to the list of unconditionally exempt items.

Information Bulletin No. 030, "Summary of Taxable and Exempt Goods and Services"

Manitoba has updated this bulletin to add educational workbooks, chemicals used to treat livestock waste, and oxygen used in the course of firefighting to the list of exempt goods, as well as veterinary services and services provided by police or fire departments to the list of exempt services. In addition, the bulletin now explains that, where a lessee has paid tax on the original purchase of goods in a sale-leaseback arrangement, the lease charges are generally exempt.

Saskatchewan

Information Bulletin PST-2, "Grocery and Drug Stores"

Saskatchewan has recently updated the list of common taxable items sold in grocery and drugstores contained in this bulletin to include aerochambers and magnetic bracelets and necklaces.

Information Bulletin PST-46, "Information for Service Enterprises"

This bulletin has been expanded by the province to provide more examples of businesses that supply exempt services, including fitness centres, landscapers, spas and tanning salons.

Information Bulletin LCT-1, "The Liquor Consumption Tax"

Saskatchewan has reissued this bulletin to clarify the tax treatment of personal and promotional liquor consumption, spillage and breakage. Liquor Consumption Tax ("LCT") must be paid on the purchase price of all liquor consumed by business owners or staff, as well as any product given away free of charge. The self-assessed tax should be recorded on the "Net Tax Collected" line of the LCT return. The bulletin also reminds taxpayers that detailed records of personal consumption, promotional giveaways, and spillage or breakage must be maintained for audit verification.