Did ebay EIS calculate my taxes wrong and what can I do if it is incorrect?
Summary: ch_297335 is confused about the tax calculation on an auction purchase made through eBay's EIS service, where the sales tax appeared higher than expected. flipistics clarifies that the sales tax was applied to both the item price and shipping, which is why the total appeared higher. ch_297335 realizes the misconception and notes that previous purchases using USPS were taxed differently. marnotom! elaborates that shipping charges from a Canadian shipper make the entire cost subject to GST/HST. Additional comments from other participants discuss the differences between GST/PST and how taxes are often applied to services, including shipping. Some also note that EIS charges a brokerage fee, which can affect the total cost.
I reside in Canada in the province of Ontario.
Sales tax here in Ontario where i reside is 13%.
I recently won an auction for $104.50 USD.
The shipping was $22.02 USD
The tax was $16.44 USD
Final Total at check out was US $142.96 = $205.89 CAD
After paying for the item I realized the sales tax for $16.44 USD was 15.7%
Where did this 15.7% come from?
Currently 1 USD = $1.38 CAD
SALE PRICE: $104.5 USD =$ 144.60 CAD
SALES TAX = $16.44 USD = $22.75 CAD
SHIPPING = $22.02 USD = $30.47 CAD
FINAL TOTAL = US $142.96 = $205.89 CAD
Should the sales tax not be $144.60 CAD x 13% = $163.40 CAD?
If so then the final total with taxes and shipping is $193.87 CAD
But some reason I was charged $205.89 CAD. (an extra 12.02 diffrence from $193.87)
The seller I bought from resides in Colorado Springs, CO, United States if that matters.
Just hoping someone can help break things down and I can understand what is going on.
mandicrafts
·10 months agoEIS also charges a hefty brokerage fee. That would be the difference.
marnotom!
·10 months agoTechnically, that charge is levied by the carrier, not eIS, and will vary.
reallynicestamps
·10 months agotaxes are charged on the declared value of item when it crosses the border
Yes.
Duty is on the item, sometimes based on its place of manufacture.
fh991586
·10 months agoI was really talking about sales taxes, not duty.
Duty is taxable, AFAIK. Or at least tariffs are, as I was painfully made aware...
marnotom!
·10 months agoFor a casual import, the calculation of taxes would be based on the declared value of the item plus any applicable duties and tariffs.
fh991586
·10 months agoOne thing I find weird is that taxes are charged on the declared value of item when it crosses the border, not the shipping price (which is never included in custom forms)...
But since eBay collected the taxes, it provided a service, hence fully taxable I presume!
femmefan1946
·10 months agoThe GST is a Goods and SERVICES Tax.
The PST was a tax on Goods.
I gather when Ontario went for a Harmonized Tax, they decided to collect on services.
Shipping is a service.
There can be small variations in the actual charge depending on the exchange rate being used.
marnotom!
·10 months agoPsst. In our fair province, PST can be applied to services, as well.
https://www2.gov.bc.ca/gov/content/taxes/sales-taxes/pst
reallynicestamps
·10 months ago@marnotom!
But not on children's shoes, something DD who is 4'11" has been taking advantage of for 20 years.
flipistics
·11 months ago@ch_297335 Sales tax is on the item price PLUS shipping. It's a percentage, so it doesn't matter whether you calculated it in USD or CAD. So $104.50 + $22.02 = 126.52. 13% of that is ~ $16.45 for a total of ~ $142.97 USD
ch_297335
OP10 months agoThank you this appears to be the problem. I did not know that the shipping is also taxed when using EIS as the shipper. I thought the shipping is a fixed price and only the item is taxable.
I have purchased items from other sellers using USPS international and when the item crosses the border at the CBSA its taxed based on the declared value of the item only.
I was very surprised ebay EIS charges taxes on the shipping as well.
marnotom!
·10 months agoI have a vague recollection of a discussion on this subject on this board from a while back. I think the conclusion was that because some of the shipping of eIS-forwarded items is purchased on the buyer's behalf from a Canadian shipper, the entire shipping charge is subject to GST/HST.