Some consumers find PST rules awkward, confusing and unfair on certain items
Published Tuesday, October 28, 2014 5:02AM CST Last Updated Tuesday, October 28, 2014 6:36PM CST
Some Manitoba consumers and businesses say they find some of the rules associated with items subject to Provincial Sales Tax awkward, confusing and unfair.
The PST is applied to thousands of items and services, but some Manitobans say it doesn’t make sense which ones have it, and under which circumstances the tax is applied.
For example, Manitoba tax law states goods and services provided for a funeral do not carry PST. But Wheeler Funeral Home general manager Chad Wheeler said most grieving families don't realize they do pay PST on funerals. When funeral homes buy caskets, urns, embalming supplies, flowers and guest books, they pay PST on these items.
“It's just we pay it and the only way we can get it back is actually from the families we're serving - we have to work it into our prices," said Wheeler. He said explaining how the PST works to families is awkward.
The PST also breeds confusion at the local bakery counter. How many sweets and what pastries you choose determines the tax you pay.
Buy between one and five cinnamon buns, éclairs, tarts or cookies and you'll pay PST. But, if you buy six or more you won't.
The Frenchway Cafe owner Larissa Webster said she has spent hours trying to understand the PST and reprogram her till so she can charge her customers properly.
She said the rules have been aggravating from a business stand point, and unfair to consumers. She admits she has even made mistakes charging PST.
“There are so many exemptions and non-exemptions, and it's almost like games, like trickery, people aren't going to spend the time to look into it," said Webster.
Grocery store items
Take a walk down the grocery aisle and the PST creates even more puzzles for the consumer to figure out.
Granola products have PST, but not if primarily sold as a breakfast cereal. Frozen raw shrimp does not have PST, but this cooked and then frozen shrimp does. Shrimp rings have PST too.
Some sugary drinks have PST, such as Kool-Aid and Tang, but Nestea does not. Unsalted nuts do not, but salted and/or mixed nuts, do.
Chocolate milk also as a strange rule. A 2-litre carton does not, nor does a 1-litre carton, but a carton with 473 millilitres, does have PST.
“I think that's unfortunate, said mother Cheryl Walmsley. “Kids who are coming to get a drink are going to get a small one and not a big one."
Some say tax law is messy
University of Manitoba tax law professor, Michelle Gallant says sales tax is messy. She said it doesn’t always make sense, but said the government attempts to collect tax revenue and target spending on non-essential items.
"They do seem to be arbitrary, said Gallant. “But generally you are trying to draw a distinction between food, or clothing and housing, heating, things that are essential and things that you would spend extra money, discretionary money on."
Not charging PST on essential items she says is also a way to give a bigger break to people with lower incomes.
As for the PST being included in the cost of funeral services, she said businesses are required to pass down costs.
The government, though, still does not collect PST on the overall cost of a funeral. GST is added, but Manitobans do save on PST. If a funeral service is $10,000, the GST will be $500 dollars, making the total $10,500. Customers are only paying PST passed down from the business on the items that have the tax, not the overall cost.