Tangle of taxes You can't have your cake and eat it unless you pay the PST… but English muffins are exempt

In July, Manitoba Tories fulfilled one of their key campaign promises from 2016: cutting the PST back from eight per cent to seven per cent.

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Hey there, time traveller!
This article was published 15/08/2019 (1387 days ago), so information in it may no longer be current.

In July, Manitoba Tories fulfilled one of their key campaign promises from 2016: cutting the PST back from eight per cent to seven per cent.

And, as we head into another election, Progressive Conservative Leader Brian Pallister is promising yet more cuts, specifically eliminating the PST on home insurance, the preparation of tax forms and wills, and haircuts and salon services over $50.

RUTH BONNEVILLE / WINNIPEG FREE PRESS Provincial sales tax is charged on toilet paper.

If you’re a Manitoban who has ever purchased anything, then you’ve paid PST on all manner of items. But do you know, exactly, what you pay PST on and what you don’t? It’s not exactly straightforward. More often, it’s unfair, confusing and also a bit funny.

Shrimp is PST exempt, unless it’s arranged in a ring. Thermometers are taxable, unless they are for a baby. What do human sperm, cocktail cherries and barbed wire have in common? They are all exempt from PST in Manitoba.

Let’s do a little dive into the often-baffling world of PST exemptions and taxables.

Not-so-basic groceries

DEB LINDSEY / THE WASHINGTON POST FILES Cream-filled croissants, unlike other croissants, are not exempt from the PST.

Most of us are familiar with groceries exemptions as they relate to GST, the understanding being that basic groceries are exempt, snack foods are taxed. Except, what’s a snack food? At first blush, it would seem as if the delineation between snack and grocery item is based on nutrition, especially when you look to the milk fridge for examples. Regular milk is PST-exempt and chocolate milk (depending on volume sold) is subject to PST. OK, makes sense.

BILL HOGAN / CHICAGO TRIBUNE English muffins, bread and bagels are all exempt from PST, but that’s not the case for many other baked goods.

But then we get into what I’m calling the Breakfast Cereal Exemption. “Chips, crisps, puffs, curls and sticks” are taxed unless they are sold “primarily as a breakfast cereal,” which ostensibly means you’re taxed on your cheese puffs but not your cocoa puffs. Ditto granola products and snack mixtures. Those are also taxed, unless they too are sold as a breakfast cereal. Ice cream is only exempt if sold in a container of 500 ml or more. Under 500 ml? Taxed.

The bakery is also a minefield. Bagels, bread and English muffins are exempt. Cakes, muffins, pies, tarts and cookies are taxed, but only if purchased in quantities under six. Regular croissants are exempt — but if those croissants happen to be cream-filled or coated and you buy, say, four of them, you’ll be paying PST.

What are the “essentials”?

Conversations about sales tax almost always ignite debate on what is or is not an “essential item.”

Prescription medications, which most people would agree are essential, are exempt, as is a long list of medical supplies required by people living with disabilities or chronic illness — think everything from diabetic supplies and artificial limbs to guide dogs and harnesses.

But other things that many people would consider essential, such as over-the-counter medications — pain relievers, cold remedies, enema solutions, etc. — as well as deodorant and shampoo are taxed. Toilet paper, too, is subject to PST.

RUTH BONNEVILLE / WINNIPEG FREE PRESS Pregnancy tests are still subject to sales tax.

While menstrual hygiene products have long been exempt from PST in Manitoba — even before the federal government removed GST and HST from tampons, pads and cups on July 1, 2015 — pregnancy tests are still subject to sales tax. Pregnancy tests are an essential item, and drugstore prices already seem pretty steep for something you pee on and then throw in the garbage.

And while most baby supplies are exempt, things mothers need, such as nursing pads, are subject to sales tax.

A note on so-called “sin taxes”

Manitobans pay PST on alcohol and cigarettes. Cannabis, however, is not subjected to PST, but retailers are required to pay a six per cent “social responsibility fee” in addition to wholesale markups.

Bottled water, which I think we can all agree is the biggest sin of all, is tax-exempt if sold in quantities of 600 ml or larger, or “if less than 600 ml, packaged and sold by the manufacturer in multiples of single servings.”

So what’s fair?

Taxing “wants,” such as cigarettes and alcohol, is reasonable, as is taxing big-ticket purchases such as electronics, vehicles and houses. But why not streamline the tax criteria, and ease the burden on actual, everyday items that people buy? Axing the PST from upscale salon services is nice, but it really only benefits Manitobans who can afford such services in the first place.

You know what everyone benefits from? Tax-free toilet paper.

Twitter: @JenZoratti

Jen Zoratti

Jen Zoratti

Jen Zoratti is a Winnipeg Free Press columnist and author of the newsletter, NEXT, a weekly look towards a post-pandemic future.

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