Stamps, parcels, and taxes.

[slitty12]

Hello!

I have a question about paying for packet/parcel services with stamps.   More specifically, about taxes when doing so.

I am based in British Columbia, which is a GST province when it comes to mail.   So, when I "Find a Rate" on Canada Post's website, standard Lettermail under 30 grams comes up as $0.66.  Since taxes are charged on when buying stamps, I have always just affixed $0.63 in face value when mailing a letter.  Hopefully what I have been doing is correct.

But what do I do when it comes to parcel services like Light Packet USA/Regular Parcel/Expatiated Parcel/etc that include tax in the rate total?  Do I affix postage equivalent in face value to the "Find a Rate" total, or do I "remove" the tax when figuring out how much in stamps my package needs?

[reallynicestamps]

A postage stamp has already had appropriate sales tax applied when you bought it. No further tax need be added.

Watch out, btw, since postal rates will change and mostly increase on March 31. There are also some changes in weight /price.

When you look at the rate, the postage, the taxes, and the fuel surcharge are separately listed. You only use the postage part when you are affixing stamps.

Even if you are buying discount mint postage from a dealer. Only the face value of the stamps

[slitty12]

I didn't even suspect that the fuel surcharges would already be included in the face value of the stamp!  Neat.

[toff3]

Slitty,

There is no fuel surcharge on Letters, Light Packets and Small Packets (all are included under Letter Post by the Universal Postal Union).

There is no tax of any kind on postage to international destinations (USA included) totalling $5.00 or more.  If you bring 5 letters to USA to your local PO, have them stamped, and leave them with the PO, you pay $5.50 in postage ($6.00 starting March 31).

Tom

[slitty12]

I just called the Customer Service number at Canada Post and was told two things:

1. One is not allowed to affix stamps to anything over 500 grams.

2. One is able to use a maximum of $3 worth of stamps, any remainder must be paid at the Post Office.

3. Small Packet and Light Packet are classified as parcels.

Really?

[ricarmic]

As a note, if you call back you'll likely hear something else, and if you call back again, you'll hear something different again - the "versions" often vary greatly between employees..... You can use as many stamps as you want on a package, not sure where they got that info from.....I've sent boxes with almost $300 worth of stamps all over it overseas...in the recent past.....which is perfectly legitimate....the ones you most care about are the staff in your local office. Find out from them what they interpret the rules as, which hopefully are correct this time.........

[pierrelebel]

" One is not allowed to affix stamps to anything over 500 grams."

"One is able to use a maximum of $3 worth of stamps, any remainder must be paid at the Post Office."

That is completely wrong.  Whoever you spoke to did give you the wrong answer.  In Canada you can put as much postage stamps as needed on any envelope or parcel using the postal system. There is no limit.

[toff3]

I just called the Customer Service number at Canada Post and was told two things:

1. One is not allowed to affix stamps to anything over 500 grams.

2. One is able to use a maximum of $3 worth of stamps, any remainder must be paid at the Post Office.

3. Small Packet and Light Packet are classified as parcels.

Slitty,

Points 1 and 2 above are complete nonsense, as Pierre rightly says.

As for point 3, I'm quite prepared to believe that. Canada Post has always played fast and loose with UPU rules and made up its own, to suit their purposes. If I can't convince you that Small and Light Packets belong to the Letter Post category you are welcome to check the UPU website http://www.upu.int/uploads/tx_sbdownloader/actInFourVolumesLetterPostManualEn.pdf

Tom

[reallynicestamps]

1. One is not allowed to affix stamps to anything over 500 grams.

Not true.

I just put a box out for recycling that had been shipped to us. There were well over $20 worth of stamps on it. Some in full sheets. (We're stamp dealers, This is pretty common.)

Our philatelic auction catalog is always stamped, for obvious reasons, and they take over $5 worth of stamps every time, More to the USA and overseas.

2. One is able to use a maximum of $3 worth of stamps, any remainder must be paid at the Post Office.

Wrong again.

But the PO will probably cancel the stamps with a felt pen making them uncollectible.

[slitty12]

So I called again (to re-ask my original question of whether I should pay the GST portion of parcel services when using stamps on which I had already paid GST), and after consulting with their supervisor, the Customer Service representative once again told me that stamps cannot be used to pay for parcel services.  This time without mention of any 500g or $3 limits.

I responded by pointing out that the consumer manuals for all Canada Parcel services (found here: http://www.canadapost.ca/tools/pg/manual/personal_default-e.asp) list postage stamps as a valid proof of payment in section 5.1, and asked what document the supervisor was referencing when stating that postage stamps cannot be used for parcel services.

The Customer Service representative put me on hold again, called someone from the Philatelic Centre, and gave me the definition of a postage stamp from the "Paying for your Mail" section of the Postal Guide (http://www.canadapost.ca/tools/pg/manual/PGpay4mail-e.asp#1416992).  This states:

2.1	Postage Stamp

A postage stamp is a stamp or impression approved by Canada Post that indicates postage payment, which can be used on certain mail items. It may be printed directly on applicable mail items (as with pre-stamped envelopes) or on gummed or self-adhesive paper which is affixed to applicable mail items. Postage stamps are available in various denominations.

I was told that the key word here is certain mail items, and that parcels were not included in these certain mail items.  I was told that stamps are meant exclusively for Lettermail, and that if I had success mailing parcels using stamps - I would have to continue doing so at my own risk of them not going through AND I would have to pay double GST by affixing enough stamps to cover the full rate of the parcel service, taxes and fuel surcharges included.

Sigh.

[asyahijab]

one day I went to shopper drug mart to mail a packet to Australia and choose to use express post service.

I paid $72 for it and I see the clerk put on 50 of stamp face value $1.05 ( total $52.5) and print the meter for the rest.

If the stamps cannot be used to send a parcel, why they were allowed to do that?

[toff3]

Slitty,

This is getting beyond ridiculous.

The face value of a stamp is exactly equivalent to the value printed on a Canada Post-approved postage meter tape (label). Stamps and postage meter tapes can be used interchangeably.

This misguided Canada Post customer service rep was attempting to dissuade you from using "Permanent" stamps bought before the March 31 price increase or stamps bought at a discount from a dealer or from putting insufficient postage in the form of stamps on your parcels (which could lead to delays and expense due to the parcels having to be returned).

And for Heaven's sake, quit worrying whether taxes and fuel surcharges are included in the value of a postage stamp. Once you've determined the correct postage (including all taxes and surcharges) from the Canada Post Find-a-Rate calculator, you are perfectly entitled to affix to your parcel stamps whose total value equals that postage.

Tom   

[pierrelebel]

"Once you've determined the correct postage (including all taxes and surcharges) from the Canada Post Find-a-Rate calculator, you are perfectly entitled to affix to your parcel stamps whose total value equals that postage."

Allow me to correct that.  It should read:

Once you've determined the correct postage (including surcharges) from the Canada Post Find-a-Rate calculator, you are perfectly entitled to affix to your parcel stamps whose total value equals that postage. Since taxes have already been paid on the postage stamps, they should be excluded in the calculation.

For example, if the Canada Post shipping calculator gives you $10.00 + $1.00 surcharge + $1.15 taxes for a total of $12.15, you only need to affix postage stamps having a face value of $$11.00 (the postage rate plus the surcharge).

Whatever contradictory information you get from the clerk at Canada Post is incorrect.

[pierrelebel]

From Canada Post website:

2

Proofs of Payment

When applied to a mailing, the following proofs of payment indicate that customers have provided payment to Canada Post. Some restrictions or conditions may apply. Refer to the appropriate service for the list of acceptable proofs of payment.

2.1	Postage Stamp

A postage stamp is a stamp or impression approved by Canada Post that indicates postage payment, which can be used on certain mail items. It may be printed directly on applicable mail items (as with pre-stamped envelopes) or on gummed or self-adhesive paper which is affixed to applicable mail items. Postage stamps are available in various denominations.

Stamps can be purchased at the following locations:

• Canada Post, post offices
• online at: canadapost.ca/shop
• by calling the National Philatelic Centre at 1-800-565-4362.

The following are not acceptable for postage:

• stamps that are mutilated, soiled, covered with transparent material or defaced in any way
• previously used stamps
• stamps from another country
• any other type of stamps not usually acceptable as postage.

http://www.canadapost.ca/tools/pg/manual/PGpay4mail-e.asp

[toff3]

For example, if the Canada Post shipping calculator gives you $10.00 + $1.00 surcharge + $1.15 taxes for a total of $12.15, you only need to affix postage stamps having a face value of $$11.00 (the postage rate plus the surcharge).

My apologies. Pierre is right, of course.

Tom

[toff3]

On thinking it over, I've concluded that Pierre is only half-right and I was only half-wrong.

The fuel surcharge is taxable so for a domestic parcel, if you were using pre-bought stamps to the value of the base postage + fuel surcharge, you'd be avoiding paying the tax on the latter. Of course, this wouldn't apply to foreign parcels, as the postage alone is way over $5.00.

Whoever got the idea of taxing postage anyway? Is Canada the only country in the world to do so?

Tom

[pierrelebel]

"you'd be avoiding paying the tax on the latter"

Think again.....

The tax (GST/HST) has been paid on the postage stamps.  So, whatever you pay with them - postage or surcharge - tax is effectively collected.

The only real tax problem occurs when you use a Canada Post service for which the tax rate payable is different from the tax rate payable on the postal service you purchase.

For example, if you live in Ontario and purchased your postage stamps in Ontario, you would have paid 13% HST on them.  If you use those stamps to pay for postage for a parcel being sent to Alberta by XpressPost, you end up paying 13% tax instead of the 5% that would be charged if you purchased postage at the CP counter.  The reverse would be true if shipping to NS where the tax is 15%

[widgetc]

One other likely restriction is the stamps must fit on the parcel or envelope. That incudes putting them on the sides and back. My local post office has canceled several whole sheets of stamps for me which were put in a clear plastic pouch and taped to the box but I think they were being more accommodating that they were required to be.

[pierrelebel]

"the stamps must fit on the parcel or envelope"

Quite right!

In the current edition of the Canadian Stamp News, the editor challenges readers to send an envelope after March 31st, franked with 85 one cent stamps!

Here is my submission:

http://pierrelebel.com/pics/canada/85cover.jpg

[ricarmic]

Good point widge.... I'll add to that that according to the "rules" one isn't supposed to overlap the stamps (probably because in theory one could hide old cancels if one overlapped the stamps), however as I mentioned earlier in this thread, 5 different post offices will treat this rule 4 different ways - I've seen stamps seriously overlapped which were applied by the postmaster themselves......

The best thing to do is ask your local postmaster what their version of the rules is specifically for what you are doing. If their version doesn't work check another close by post office/master to see if their rules are more (accurate) or work better for you.... I know of fellow eBayers that in the past have driven a fair distance to a non-local PO because they've found a PO location that didn't believe in the Fuel Surcharge and didn't add it (which really while it saves 5-10% off the package price, driving 45 minutes to get to the PO and back costs more than one would save.....which also can't happen anymore for any PO location that is "connected" and scans stuff in).

It really won't matter what the customer support folks say anyway as it is the local PO that decides if you're following what they understand the rules to be.....once it is in the mail stream generally it will be fine.....