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Old Mar 30, 2011, 05:11 PM   #1
TourIQ
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Default Can USA companies charge ON HST tax?

I just went to checkout from eBay to get two 3.3 Ah NI-MH batteries for my Makita cordless drill. Shipping via USPS First Class Internation to Canada. At PayPal the charges were the item cost + $38 shipping + $17 for Ontario tax (I assume this is HST).

I was never charged tax from the USA before.
Do they even remit this to Revenue Canada?
Is this a new extra cash grab for USA retailers?
I am getting tired of taking it in the arse again.
Anyone else seen this before?
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Old Mar 30, 2011, 05:25 PM   #2
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Default Re: Can USA companies charge ON HST tax?

Unless they have a CDN warehouse they ship out off ?????????
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Old Mar 30, 2011, 05:27 PM   #3
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Default Re: Can USA companies charge ON HST tax?

I think it's a tariff (hope im using the right term). Canada charges goods declared that are coming into the country. Companies usually estimate the amount and charge accordingly. I think smaller companies sometimes try to sneak it through, but most charge the tax, and hand it over when they ship the item. Amazon.com has charged me in the past. They estimate the cost and cover the difference if they are wrong as far as I can tell.
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Old Mar 30, 2011, 05:28 PM   #4
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Default Re: Can USA companies charge ON HST tax?

They can only collect if they have a business presence in Ontario. Who are you dealing with?
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Old Mar 30, 2011, 05:31 PM   #5
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Default Re: Can USA companies charge ON HST tax?

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Originally Posted by tickyboy View Post
They can only collect if they have a business presence in Ontario. Who are you dealing with?
Out of Blaine, WA.
Ebay # 380328651245. If they had a ON or Canada presence they wouldn't be charging international shipping from the USA.
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Old Mar 30, 2011, 05:58 PM   #6
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Default Re: Can USA companies charge ON HST tax?

Bentley should probably clarify this but HST is applied to "the place of delivery" for goods
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Old Mar 30, 2011, 07:04 PM   #7
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Default Re: Can USA companies charge ON HST tax?

They can charge you an export fee (duty and taxes) before hand, that is paid to Revenue Canada. In this way, your purchase is cleared by customs before it even arrives at the border. To be sure that the total amount of tax they collect from you is going to Revenue Canada, you will need to contact the carrier used for shipment. So again, if you do pay taxes to them, your item should arrive without any extra fees to be paid. That said, it should not be called HST.
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Old Mar 30, 2011, 07:07 PM   #8
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Default Re: Can USA companies charge ON HST tax?

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Originally Posted by cmsgerr View Post
They can charge you an export fee (duty and taxes) before hand, that is paid to Revenue Canada. In this way, your purchase is cleared by customs before it even arrives at the border. To be sure that the total amount of tax they collect from you is going to Revenue Canada, you will need to contact the carrier used for shipment. So again, if you do pay taxes to them, your item should arrive without any extra fees to be paid. That said, it should not be called HST.
Thanks for the update from everyone. It was called ON tax, I called it HST since it was about 13%. Now I will just send the item to my buddy in TN for half shipping and no tax then he can resend it to me with other purchases.

What I can't understand many times via USPS I pay no upfront tax and the post office doesn't even add the $6 brokerage fee or any tax, so with seller adding it up front, I do not have the chance of paying ZERO tax like I do now.
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Old Mar 30, 2011, 07:13 PM   #9
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Default Re: Can USA companies charge ON HST tax?

Quote:
Originally Posted by tickyboy View Post
They can only collect if they have a business presence in Ontario. Who are you dealing with?
That's not true.

They can collect as long as they are registered with the provincial government.
Therefore, they must submit collected tax to that provincial government.
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Old Mar 30, 2011, 07:38 PM   #10
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Default Re: Can USA companies charge ON HST tax?

Expect to see more taxes being charged in the future, as States and Provinces are finding ways to get back the taxes that they have been losing. Bricks and mortar stores are arguing that it is an unfair disadvantage to them. In this day and age, it could easily be worth millions of dollars to a Province like Ontario in lost tax revenue.

My understanding of the rules are that if a business has a presence in the State or Province that the goods are being delivered to or have registered in that State or Province to collect sales tax, then they are responsible for collecting the taxes. It's why for years, even before the interweb, you'd see forms in a magazine for instance that say something like "NY residents add xx%". Usually it was for the State or Province where the company had their headquarters.

Amazon is closing a distribution center in Texas as a result of a fight they've been having with that State over the collection (or non-collection) of State sales taxes.

The rules are getting stickier with cross border purchases. It's also getting stickier with outfits like ebay who at times claim that they are not the actual retailer, thus should not be responsible for what is and isn't charged sales tax. Some governments are claiming that ebay is acting as a form of consignment reseller, therefore should be responsible for collecting appropriate taxes.

BTW, did you know that even if the company who sells you a product does not charge sales tax that by law you are responsible for giving your home province/state the appropriate tax amount?

Yeah right, how many people do that!?!
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Old Mar 31, 2011, 03:08 AM   #11
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Default Re: Can USA companies charge ON HST tax?

Quote:
Originally Posted by Kace View Post
...They can collect as long as they are registered with the provincial government.
Therefore, they must submit collected tax to that provincial government.
^^^^ This is precisely right.

Other online merchants like LL Bean and J Crew have the same practice.
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Old Mar 31, 2011, 02:04 PM   #12
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Default Re: Can USA companies charge ON HST tax?

Quote:
Originally Posted by acgolfer View Post
Bentley should probably clarify this but HST is applied to "the place of delivery" for goods
Only by a remitting Canadian entity. For shipping within Canada, my company charges 12% HST for BC, nothing for Alberta, etc. even though my company is based in Ontario.

Generally speaking, American and other foreign entities do not collect or remit HST/GST, and only larger companies like LL Bean, Lands End, etc pre-calculate and collect duty. I'd ask for clarification of what that charge actually is.

My company ships product to the US all the time. We neither collect nor remit US taxes to the US IRS. The US purchaser is solely responsible for all taxes, duties and/or tariffs that may be payable.

I know certain website will charge you for so called "duty" but you will often also get the notice to pick up your purchase and there will be brokerage owing (with Canada Post, this amount is only $5.00 plus HST). Don't let US sellers ship to you via UPS or or couriers or you may end up having to pay more in brokerage at your front door than you bargained for.

Ella

Last edited by Ella; Mar 31, 2011 at 02:10 PM.
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Old Mar 31, 2011, 02:24 PM   #13
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Default Re: Can USA companies charge ON HST tax?

Here is what LL Bean has to say on the subject of collecting duties and taxes on some sales to foreign nationals.

"Duties and Taxes
Q. Do you calculate duties and taxes for orders shipping outside the US?
A. The answer varies depending on where your order is shipped:
  • L.L.Bean collects duties and applicable GST/HST/PST at the time the order is placed and remits the proper amount to the CBSA. By ordering goods from L.L.Bean, Inc., you authorize our Customs Broker to act as your agent to transact business with the CBSA to clear merchandise, pay duties and taxes, and to handle any merchandise returns and refund claims on your behalf. You further waive and transfer your right to receive the actual amount of refund of duties and taxes to our Customs Broker. All duty and tax paid will, in turn, be refunded to you directly by L.L.Bean, Inc. We assess 0% for duty and brokerage on goods made in the US, Canada and Mexico and 19% on all other goods. Please refer to an itemís description for details on where it was manufactured. Please contact us for more information. Taxes will be applied as follows. ON, NB and NL add 13% HST. NS add 15% HST. BC add 12% HST. For orders shipped to any other province or territory, add 5% GST. QC orders add 8.5% QST to the total, including GST. For shipments to ON and BC, PST collected for any childrenís apparel or footwear will be refunded to you after your order is processed.
  • Orders shipping to Japan: There may be duties applied to the order that are not calculated during checkout. Please note that these duties are not collected by L.L.Bean and that customers are responsible for any additional duties at the time of delivery. Please contact us for more information.
  • Orders shipping to destinations outside the US, Canada and Japan: Duties and taxes, if imposed on your order; are due at time of delivery (these charges are not calculated during checkout and are not collected by L.L.Bean). Please consult your local customs office for more details about duties and taxes.
  • Gifts sent to a recipient outside the US and Canada: The recipient will be responsible for any duties and taxes, which will be due at time of delivery."
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Old Mar 31, 2011, 02:37 PM   #14
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Default Re: Can USA companies charge ON HST tax?

Precisely what I was saying Mpare... which is why I find it curious that a seller on eBay would be attempting to do the same thing... IF that is what the $17 charge is actually for.... thanks for providing the precise language.

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Old Mar 31, 2011, 05:44 PM   #15
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Default Re: Can USA companies charge ON HST tax?

Quote:
Originally Posted by Ella View Post
Precisely what I was saying Mpare... which is why I find it curious that a seller on eBay would be attempting to do the same thing... IF that is what the $17 charge is actually for.... thanks for providing the precise language. Ella
I checked the item today on a different computer and the seller jumped the price an additional $10 / item for the same eBay number so with shipping to Canada via USPS and the ON tax they collect (probably not remit) it came to $140 USD. On my wife's computer it was still loaded in the browser from last night so I did a Buy It Now and sent it to my friend in TN for $89 and he will include in another shipment he is sending my way. Almost got the 2nd item for free with no ON tax collected. More than one way to skin a cat.
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Old Mar 31, 2011, 09:31 PM   #16
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Default Re: Can USA companies charge ON HST tax?

Thanks for the clarification.


Quote:
Originally Posted by Ella View Post
Only by a remitting Canadian entity. For shipping within Canada, my company charges 12% HST for BC, nothing for Alberta, etc. even though my company is based in Ontario.

Generally speaking, American and other foreign entities do not collect or remit HST/GST, and only larger companies like LL Bean, Lands End, etc pre-calculate and collect duty. I'd ask for clarification of what that charge actually is.

My company ships product to the US all the time. We neither collect nor remit US taxes to the US IRS. The US purchaser is solely responsible for all taxes, duties and/or tariffs that may be payable.

I know certain website will charge you for so called "duty" but you will often also get the notice to pick up your purchase and there will be brokerage owing (with Canada Post, this amount is only $5.00 plus HST). Don't let US sellers ship to you via UPS or or couriers or you may end up having to pay more in brokerage at your front door than you bargained for.

Ella
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