Canadian Tax Calculation by eBay invoicing module

[futuretech_liquidations]

After checking with Revenue Canada we are told that shipping and handling charges are taxable.

The new TAX option within the eBay invoicing only calculates taxes on the SALE amount despite having the option check to calculate taxes on the sale amount plus shipping and handling.

Anyone else experiencing this problem???

Thanks

TIM @ FTL

[funkywatch_com]

Paypal allows to automatically invoice both. However just for one tax...

[jakeeangel]

Actually Monique you are supposed to collect PST on shipping and handling in Ontario.

---

[recped]

As jakee mentions only certain specified services are exempt.

Under normal circumstances, postage and handling charges are taxable in Ontario.

http://www.trd.fin.gov.on.ca/userfiles/HTML/cma_3_6519_1.html
"What else could I do? I had no trade so I became a peddler" - Lazarus Greenberg 1915

[fatdane]

As I rember the Ontario PST regulations, stamps sold for face value are exempt from PST( ie Canada Post counter sales). If the stamp are [art of a shipping charge the entire shipping, shipping and handling, or whatever it may be called is taxable.

[whoscloset]

I'm not clear on the details, however...

I use UPS and Canada Post. Neither has EVER charged PST on items shipping within Ontario. If I'm not having to pay PST, I don't feel right charging it to the customer.
Monique

Himalayan Salt Lamps - A Guide to Purchasing

[fatdane]

If you go to a live auction in Ontario, or to a wholesaler, and buy something to resell you would use you PST number to fill out an exemption certifiacte and you would not pay tax on the merchandise that you bought, but you would still be required to collect PST on anything that you sold to an Ontario purchaser - same as buying postage at Canada Post, and it ends up being part of a taxable transaction. There sometimes is not a lot of logic to both the PST and GST rules but in general if in doubt collect and REMIT tax. Don't be tempted to delay remitting at the tax deadline, or send an elastic cheque. Hell hath no fury like a tax man stiffed.

[tobyshitzu]

The shipping is taxed, otherwise it would be a simple way to aovid tax by charging a huge shipping fee for delivered merchandise.

[tobyshitzu]

The shipping service doesn't charge tax. The retailer charghing S&H with the purchase of goods must charge tax. Very clear in the RST guide, two differenet things.

[whoscloset]

Okay, reread that link provided by recped and I might just be wrong on this one. Think I'll call my CPA and check. :)
Monique

Himalayan Salt Lamps - A Guide to Purchasing

[recped]

Think I'll call my CPA and check. 🙂

Hope you have a good one, most don't have a clue when it comes to the minutiae of provincial sales tax.

From the Retail Sales Tax Act

51. Uncancelled postage stamps and uncancelled revenue stamps valid for the transportation of mail or for revenue purposes in the jurisdiction issuing such stamps, if the consideration for the sale thereof does not exceed the equivalent face value thereof in Canadian funds. R.S.O. 1990, c. R.31, s. 7 (1), par. 51.

A specific exemption exists, your customers don't receive "uncancelled postage" and they probably pay more in "consideration" than the face value.

I'll take half the standard CPA fee for this consultation :^O
"What else could I do? I had no trade so I became a peddler" - Lazarus Greenberg 1915

[futuretech_liquidations]

Revenue Canada and M.O.F will both confirm that shipping and handling charges are TAXABLE.

We have had to stop using the tax calculation that is part of the eBay invoicing system since it does not calculate the tax properly and are now manually entering the tax amounts.

Who at eBaY is in charge and what if anything are they doing about it???

Lillybean -- put this one down in your ever growing list of TO DO's.