Sales Taxes and such.

[Ilikecoffee]

Hola folks.

I'm a bit concerned about some sales taxes being charged (and whether or not they're actually being remitted) by some vendors. I won't name any vendor specifically, but I'm based in BC, and I was going to place an order with a vendor in Alberta (where there's only GST) and I was being charged what looked like 12% taxes (gst + pst - or was it the harmonized tax, which is long gone now) on my order. And on top of that, I was charged the full taxes on shipping as well, which, AFAIK, is already included in shipping costs. I've emailed this vendor, and I am waiting on a reply. I'm hoping it's just an accounting / software error.

A BC vendor recently started charging taxes (they didn't used to), so I asked if they could tell me their BN / taxation number. My email was ignored.

Look. I have no problems paying taxes on these purchases... but only if the taxes are fully being remitted to the governments that collect them. Businesses in Ontario, Alberta, etc are not collecting BC PST, and shouldn't be charging it. And if people are operating this as a cash only (interac) business, they should not be collecting GST either, unless, again, they are remitting it. And if they are remitting it, I believe legally they have to disclose their BN / Taxation number. If a vendor is collecting tax but not remitting it, that is fraud.

I'm not quite sure why a vendor would be hesitant to share their BN / taxation number upon request, especially from a repeat customer. If there's a worry that you could be tracked or reported to the government for selling vape gear, IMO it's a minor worry. A much bigger worry is CRA coming down on you for collecting taxes you aren't remitting in full (or at all).

Anyway... needed to vent a bit.

 

[jensy]

Vendors should be charging GST and the other taxes of their province so I have no problem paying it . What they do with the tax money is up to them and their burden to carry so after I purchase I don't think any more on the subject . There is so many big problems in the world to worry about so I don't tend to sweat the small stuff and let other peoples business be their own.

 

[retired1]

The rules on taxes are somewhat convoluted for online businesses. If I recall, if sales are under a certain amount each month, there are some taxes that don't apply. But as soon as projections indicate that the sales will go over the cap, then those taxes have to be collected.

Trust me. The guberment knows when they aren't getting their cut and they waste no time in letting businesses know about it. I wouldn't worry about it.

 

[Battlelance]

If I recall, if sales are under a certain amount each month, there are some taxes that don't apply.

If your yearly sales exceed $30,000 you are required to register for GST, at which point you are required to collect and remit GST and whatever provincial tax applies to the province of the purchaser (if you're in BC and buying from say PEI, you pay 14% HST).

If you're GST registered and you're sales are UNDER $30k/yr, you're still required to collect and remit unless you un-register (which opens another can of worms because you'll need to remit GST on input tax credits you received for purchases).

Registrants are also required to display their registration number on all invoices $30 and above. It will look like 99999 9999 RTXXXX.

Hope this helps.

edit: My overview here is extremely simplistic but gets the general idea across. CRA has a section of their site specifically about collecting sales tax with all the rules and examples. h##p://www(dot)cra-arc(dot)gc(dot)ca/tx/bsnss/tpcs/gst-tps/gnrl/stps/cllct-eng.html

 

[Talyon]

Any Vendor I deal with across Canada charges me taxes, are they right or correct couldn't tell yah. That's a Vendor problem not mine.

I understand your rant justyhe same OP, Ty for sharing

 

[Anxdiety]

double post by accident.

 

[Anxdiety]

My favorite vendor just ended their promotion of no taxes to implement a $5 flat rate shipping option. Seems like a fair trade off.

 

[BXfan]

If your yearly sales exceed $30,000 you are required to register for GST, at which point you are required to collect and remit GST and whatever provincial tax applies to the province of the purchaser (if you're in BC and buying from say PEI, you pay 14% HST).

If you're GST registered and you're sales are UNDER $30k/yr, you're still required to collect and remit unless you un-register (which opens another can of worms because you'll need to remit GST on input tax credits you received for purchases).

Registrants are also required to display their registration number on all invoices $30 and above. It will look like 99999 9999 RTXXXX.

Hope this helps.

edit: My overview here is extremely simplistic but gets the general idea across. CRA has a section of their site specifically about collecting sales tax with all the rules and examples. h##p://www(dot)cra-arc(dot)gc(dot)ca/tx/bsnss/tpcs/gst-tps/gnrl/stps/cllct-eng.html

Seconding this info as correct as it is something i deal with at work. However as others have said i'm not going to demand the tax # or complain that it does not appear on invoices. Some vendors - whether rightly or wrongly - believe they are operating in a grey area to begin with, and may be hesitant to deal with that kind of inquiry.

 

[Ilikecoffee]

The vendor in Alberta that was charging me BC PST sales taxes came back today in emails saying he fully remits to the BC government these tax monies.

It's very strange. I purchase photographic equipment from a vendor in Alberta - a very well known one, and because it is out of province, they do not charge anything but GST. I purchase occasional goods from other provinces (Ontario, Quebec, Alberta) from large vendors (Vistek, Henry's, etc) and do not get charged BC PST. But this tiny e-cig vendor does collect the BC PST and claims he pays it to the BC government, and since HST left, this is the first instance I've ever heard of a out of province vendor (without a BC office) collecting BC PST tax.

His paperwork must be nightmarish.

Again, I have no problems paying taxes owed when they are remitted. If someone is operating this as a cottage industry, cash business, and not paying the taxes back to the various governments, then it is fraud and they are also taking advantage of us customers as well.

 

[BXfan]

The vendor in Alberta that was charging me BC PST sales taxes came back today in emails saying he fully remits to the BC government these tax monies.

It's very strange. I purchase photographic equipment from a vendor in Alberta - a very well known one, and because it is out of province, they do not charge anything but GST. I purchase occasional goods from other provinces (Ontario, Quebec, Alberta) from large vendors (Vistek, Henry's, etc) and do not get charged BC PST. But this tiny e-cig vendor does collect the BC PST and claims he pays it to the BC government, and since HST left, this is the first instance I've ever heard of a out of province vendor (without a BC office) collecting BC PST tax.

His paperwork must be nightmarish.

Again, I have no problems paying taxes owed when they are remitted. If someone is operating this as a cottage industry, cash business, and not paying the taxes back to the various governments, then it is fraud and they are also taking advantage of us customers as well.

The vendor selling photographic equipment is not in compliance with existing tax law. Any vendor selling goods or services to another province is required by law to collect and remit the tax applicable to the destination province.

 

[Ilikecoffee]

The vendor selling photographic equipment is not in compliance with existing tax law. Any vendor selling goods or services to another province is required by law to collect and remit the tax applicable to the destination province.

Please show proof of this. Because I am a GST / PST registrant myself, and there's nothing in my documentation or advice from my accountant that I should be charging anything other than GST/HST to out of province clients.

OTOH, I do recall reading several times over that the onus is on the recipient to pay the tax, themselves, to their local provincial government, for out of province purchases via mail.

 

[Zurd]

I don't know much but if the business has an office/headquarters located in said province, they need to charge the taxes of said province. If they do not own an office/HQ in said province, they are not required to charge the taxes which just makes sense, they owe nothing to that province.

Which is why some company can get away for not charging the Quebec taxes (which is high) in online purchase because they do not have any office in Quebec yet they're located in Canada (I love online purchase!).

 

[Walt42]

The way my company does it is that the tax is charged in the destination Province.

 

[Battlelance]

Please show proof of this. Because I am a GST / PST registrant myself, and there's nothing in my documentation or advice from my accountant that I should be charging anything other than GST/HST to out of province clients.

OTOH, I do recall reading several times over that the onus is on the recipient to pay the tax, themselves, to their local provincial government, for out of province purchases via mail.

http://www(dot)cra-arc(dot)gc(dot)ca/tx/bsnss/tpcs/gst-tps/gnrl/hst-tvh/gds-eng.html

You are right that this really only applies to GST/HST provinces.

All other provinces have their own set of rules which can be found at:

http://www(dot)canadabusiness(dot)c...es_tax_to_out-of-province_territory_customers

Generally speaking, if the province has PST, you're required to register at each individual province to remit, though only if you actively market there, have an office or in some cases an employee.

 

[BXfan]

Unfortunately the government does put a sometimes confusing burden on vendors. I work with an agency that is partially government funded. When companies from other provinces invoice us and the tax is incorrect we have to either go back to the company and ask them to correct it, or self-assess the tax difference.

 

[Ilikecoffee]

Unfortunately the government does put a sometimes confusing burden on vendors. I work with an agency that is partially government funded. When companies from other provinces invoice us and the tax is incorrect we have to either go back to the company and ask them to correct it, or self-assess the tax difference.

There is less confusion than you may think - another fellow posted a link to CRA's website with examples. It's quite clear that when selling out of province, you only charge GST/HST; the only time you collect PST is when you are registered, as a business, in that province you are collecting PST for, and/or have an employee working in that province where your out-of-province goods are being shipped to.

The more I think about this, the more I'm convinced this Calgary vendor is pocketing collected tax revenue. I also got a strange response from them about their e-commerce system being limited, and that they would remove all tax collecting temporarily. Very strange.

Again, I'm not looking to avoid paying tax. I want to make sure any sales taxes I'm charged are actually going to the governments that demand them.

 

[retired1]

Not all e-commerce solutions are geared for Canadian tax code and unless you know them inside and out, trying to code the rules into the e-commerce software is a royal pain in the behind.

 

[DJKevinMichael]

I own a construction company based in bc but we also operate in alberta if work is done in bc we charge bc tax if work is done in alberta we charge alberta tax no matter which tax we collect it is remitted in bc