@canada_goose_whisperer wrote:
Ok, so here's what I'm struggling with. "Value-added tax" (or Goods and services tax/GST/HST as we know it in Canada) at essence, is supposed to be applied when some kind of value has been added to a product. When we are selling a pair of used shoes on eBay, we have already paid the sales tax when we originally bought them new. That tax represents the "value-added" by the manufacturer, taking the raw materials and turning them into a pair of new shoes. When we use those brand new shoes, and eventually sell them in a "used" condition, we have not added any kind of value to those shoes, in fact the value of those shoes has decreased, so what is there to be taxed. If the answer is "well its because you sold them on the internet", then what is the point of us paying hst on our ebay fees? The "value-added" in the transaction is the ability to sell on the internet, which is why we are taxed on our ebay fees. Do I like it? No, but it is what it is. Used goods however have not had any value added to them that would require being taxed. Now, if we sold a rare item that had increased in value compared to its original purchase price, then that would be income tax we should be paying on it's value increase, not hst, as we have not added any value to it compared to when it was first purchased and hst paid. The value increase is strictly speculation, numbers, etc, not anything the seller has done to it. If we are charging hst on products sold in pre-owned condition because their value has raised due to rarity/speculation/etc then why are we not being charged hst on the purchase of a share in a company's stock? We get charged a convenience fee and sometimes tax on top of that (like ebay), but if I buy $100 worth of stock in Apple, I'm not getting charged 13% hst on that purchase. If the seller has added value to the goods (modifications, changes, repair, etc...), then more often than not they are already a business anyways. "Cleaning your pair of old shoes" is not adding value to them, as the original value is from when they were first purchased.
Sorry but not sorry for the rant. If you are a business or making over $30,000 then okay yeah you'll have to charge and remit hst because you are buying and selling, but Gladys from across the street should not have to pay 13% hst when she buys my old golf clubs, because I already paid that tax when I bought them new, and I have not modified or added any value to them.
Interesting read if you have the time: https://worthwhile.typepad.com/worthwhile_canadian_initi/2011/05/why-is-there-hst-on-used-cars.html
Maybe I'm misguided, but I feel quite strongly about this so please forgive my massive paragraph of words. I am open to criticism/corrections if you have any please share, discord amongst us is how we can understand this better.
Thanks.
Furthermore, the government doesn't require hst collecting and remittance on $30,000 or less per year. Even assuming this is because it's too costly and not worth it for the government to process hst amounts that low, then okay fine ebay offers an easy way for the government to collect on those small amounts, so they're going to use it.
But that still doesn't mean they should be collecting hst on USED goods sold online, as (like I said above) no value has been added to them, if anything it has decreased in value. The hst was already paid when the item was purchased new. The only way this actually makes sense is if ebay gives an option for the seller to click a box stating that the item has been "modified or changed in a way that adds value compared to what it was in new condition". If hst is being collected on everything regardless then that's flat out wrong.
Further furthermore, even NEW goods, if they've already been bought from the store (for example, you bought a movie that you never got around to opening and watching) that still should not be subject to hst because you paid it WHEN YOU ORIGINALLY BOUGHT THE ITEM. Selling a "new condition" good does no mean it should require hst collection, if no value or change has been added to it. The hst should be just on the ebay fees we pay that allow us to use the platform to sell old stuff from our house, as that is where the value is being added - ACCESSIBILITY. NOT ON THE ACTUAL PRODUCT.
Thank you for coming to my TED talk.
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Edit: A reply to your post can be found here.
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