Double Tax

[orbitdrop.ont_01]

I've been fishing for an answer that has been eluding me for some time. I've gone as far as contacting GST rulings officers with the CRA to have my question answered but it seems they consider it a "dark area".

In light of a recent discussion that started towards the garage sale topic, my question is this:

Should the government be able to charge GST on an item that GST has already been collected on?

I know local auctioneers charge you GST when you buy used goods. I know I charge GST on the used items I sell in my physical location. I remit these taxes to the government and started wondering why.

Why should the government collect GST twice on items where GST has already been collected at one time or another? If I walk into a consignment store and buy a used 50" plasma TV I'll pay GST on it when the original owner of the TV paid the tax initially. I understand charging tax on the consignment service which the consignor should do for the consignee but double GST on items does not seem correct to me. Apparently the 3 GST rulings officers were as unsure as I was.

Has anyone ever delved deeper into this issue? Or has anyone even questioned it before? Does anyone even care?

[katiusciav]

Should the government be able to charge GST on an item that GST has already been collected on?

um...i don't mean to be rhetorical, but this is probably one of the LEAST arguable areas that the government practices that is questionable by many. this is the canadian government for god's sakes...they need the money more than we do..remember?!?!:O

i haven't questioned this particular double gst collection thing before, but i've questioned many other items before, and have learned one thing: it rarely makes a difference.

JMO

[futuretech_liquidations]

Given that is the goverment you are dealing with unless you have a huge nest egg to spend on attorney fees this is really a non-win issue.

Although I agree with you that why should anyone have to pay the tax again on a USED ITEM I doubt seriously as a business they would let you get away with not charging/collecting the tax for them. Whereas if you are a private person selling items via a YARD or GARAGE SALE they are less likely to ever bother you for taxes.

If all the business got together and fought the government in court then we might have a very slim chance at some change but then they would only pass or revise a new law to accomodate for the double tax so in the end they would win eitherway.

Regards,

FTL

[jakeeangel]

Ever bought a used car? Nuff said. That's the way it is and there's nothing we can do about it. You will not win this one.

Same thing when you buy stuff in the States and bring it over, you pay tax on the US tax. Why? Because they said so. 😐 I bought a computer and paid US tax. When I declared it I had to pay Canadian tax on the final total including the US tax. I asked about the US tax and they said, 'So?' Ok then.....That's the way it is. Move on.

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[alero0]

If you really want to upset yourself just think about the fact that we pay tax on our taxes. When you pay for something, the provincial tax is added on and then the GST is added to that total. It's like jakeeangel said, That's the way it is!!!

[duujogl]

I can't speak for the ruling in Quebec, but in BC the PST is charged on the base purchase price and the GST is charged on the base purchase price plus S&H. GST isn't charged on the total after PST is added as far as I understand the masses of rules and regs they've sent us - I've always assumed that was the way it is in all of Canada.

[alero0]

Sorry, I got it backwards. Here in Quebec The GST is charged to the base price and then the PST is charged to the total. So no matter order it's done, here in Quebec we're paying tax on tax. Vive le Quebec!

[fatdane]

When you are buying something "used" or for that matter "new" for resale the GST that you pay out becomes an Input Tax Credit that you deduct from the GST that you collected. If you sell enough things to buyers outside Canada ( zero rated sales and no GST collected) you may pay out more GST than you collect, and will get a cheque from the Government for the overpayment. In "Government" logic the net tax paid on any item is not collected "twice, thrice or more" because the Government in some form will pay back all those input tax credits, albeit very slowly at times.

[tea_past_times]

fatdane has it right. If you are registered and have a GST number and are filing GST returns, you can claim back ALL the GST you pay in the course of doing business. The GST on your gas, your inventory, your rent, your meals when working, etc etc. all comes back in the form of input tax credits. We file monthly GST returns and often have received a cheque back from the government in 4-6 weeks. If you have a vendors permit(in Ontario anyway) you can show that when doing business and the PST is not added to your invoice(sometimes a hassle), but WORTH IT. So WHAZZAPROBLEMWITHTAXES???????????

-PHIL

PHIL

[tea_past_times]

Sorry about the double PHIL