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Sales tax on shipping cost
How is eBay able to collect sales tax on the shipping cost? I've just sold an item for $5 + postage $17.90 (yes, Canada Post at work) = $22.90 on which eBay has slapped 12% for the buyer. $2.75 tax on an item worth $5??
9 comments
kh-leslie
·3 years agoHi everyone,
Due to the age of this thread, it has been closed to further replies. Please feel free to start a new thread if you wish to continue to discuss this topic.
Thank you for understanding.
byto253
·3 years agoWhen you report business revenue to the CRA, it includes shipping. That is not an eBay thing, it has always been that way. You pay tax on shipping always.
mrdutch1001
·4 years agodid you not read all the info regarding the sales tax process?
The buyer pays the sales tax/Hst as per the buyer's provincial sales tax and the seller pays fees on the TOTAL of the TRANSACTION.
aramatic
OP4 years agoHow is this ethical? The postage is not part of the value of the item on which sales tax is based. I'd also like to see an audit of where this money goes, just as I'd like to see an audit of where the so-called "import charges" go that are part of the awful Global Shipping Program.
mrdutch1001
·4 years agoeBay hasa said this about the taxation process:
"eBay will be collecting the GST/HST/PST/QST on all intra-Canada transactions beginning on this date and remitting the tax collected to relevant government or taxation agency.
if a Canadian seller is required to collect GST/HST/PST/QST, fees are imposed on the total sale price paid by the buyer, inclusive of shipping and taxes. This is the same for a Canadian seller concluding a transaction in the US, where sales taxes may be due on the transaction. Fees will continue to be imposed on the total sales price. Note that any sales tax/GST/HST/PST/QST collected is immediately placed in a liability account whereby eBay pays the relevant government or taxation agency.
eBay is implementing and utilizing third-party taxation systems to differentiate tax exempt goods from each other. We will have an entire list of exempt items and rules at the Federal and Provincial level.
Note that most used items are subject to the tax. The requirement for taxation is based on the transaction, not the item. The buyer in each individual transaction separately pays the GST/HST/QST/PST as applicable."
lotzofuniquegoodies
·4 years agoAny guesses as to what happens to the(any) IST credits if a seller is NOT registered with the CRA? Is it held on account or available as a gift certificate? 😯
-Lotz
recped
·4 years agoAny guesses as to what happens to the(any) IST credits if a seller is NOT registered with the CRA? Is it held on account or available as a gift certificate?
You snooze you loose! Not sure what you mean by "held on account", I suppose you could think of it as the unregistered seller holding them until they register.
I know that a registered entity can use ITC's going back up to 4 years past the reporting period in which they were incurred. I think there is a shorter period (1 year???) you can go back prior to your registration date.
In either case above one would need to check the current rules, my experience is from 20 years ago.
howe_james
·3 years agoLet's put it this way to maybe grasp things easier. As the seller you pay 5% G.S.T. on the shipping because it is a service in Canada. As the buyer, you pay 13 % H.S.T. on not just the item, but also on the shipping. The buyer is paying 8% (P.S.T. portion) more for the original shipping cost than the seller initially did. Does it sound like double dipping and a rip off? Well, that's because it is and unless there is a law our government suddenly came up with pertaining exactly to this (which I can'tfind), probably illegal too. I wonder how much just that 8% amounts to in just Canada on Ebay and Reverb.com as they do the same. I almost smell a class action lawsuit here unless someone can rationally and legally explain away what I've said. I can't speak for anywhere else other than Canada as the tax rules are different elsewhere. Now, let's ask where that money is going.
I've talked to Reverb.com about this and so far have gotten nothing but deflection and the company line. My guess is the same at Ebay. I am going to contact the government to find out more as well, because I'm going to assume no one will want to own or be part of something that is way bigger and badder than it looks, yet not surprising.
Shipping should not be on the taxable part of an invoice to the consumer. Just remember this, EVERY TIME you buy something off Ebay or Reverb.com in Canada, the seller pays 5% tax for shipping and YOU pay 13% or whatever your provinces H.S.T. is for that same shipping. It's like charging the seller sales tax for selling. Leaves you feeling warm and fuzzy inside, doesn't it?
mrdutch1001
·3 years ago"I almost smell a class action lawsuit"---
and another wishful thinking dreamer who thinks "class action lawsuits" are the answer to everything they "think" is not appropriate/legal/to their liking,etc.
This is NOT unique to eBay...
I have done a lot of mail order over the years....taxes on shipping has been around several years already...
EX: recent order from a garden seed company includes taxes (GST & PST) on the TOTAL transaction, including shipping...
Get over it, move on because wishful thinking is exactly that - a mindless exercise in futility...