Ebayer not charging PST/GST

[iwantmyriokarma]

I'm a god-fearing ebay seller who pays his taxes and has his ducks in a row.

Let's say I observe an large, (100k+ a year) ebayer who isn't charging GST and PST, even though its obvious he must. I'm guessing he doesn't report his income either.

If someone reports this, what action could the provincial or federal government take, realistically?

[axe_n_gear_music]

From what I've seen, there are many sellers who do not charge the GST or PST up front on eBay. Instead, they take the taxes out later, and do properly file their taxes when they are due.

Personally, I would rather charge them up front and show it in my listings, so the buyer knows precisely what he is paying for, plus it makes the tax figuring so much easier later.

And to your last question, I would say that if this seller is not reporting his income and filing his taxes that are due, then it's only a matter of time before he is caught anyway, and he/she will be forced to pay back taxes on the amount in arrears. I would not want to be them!!! 😉

Cheers,
AXE

[coxengines]

We sell way over 100k/year on eBay alone and don't charge taxes.

That does not mean we don't report our sales and remit taxes.

98% of our sales are to outside of Canada and we are not going to bother charging our Canadian buyers taxes, it's that simple.

Bernie

[iwantmyriokarma]

I believe the seller in question targets to Canadians. I know this because I am in the market. Among other things he lists in $C.

Sellers must charge GST or PST by law or state that the taxes are in their listing. If you don't mention that these taxes are included in the price, you are breaking the tax code.

[dipmicro]

Sellers must charge GST or PST by law or state that the taxes are in their listing.

Actually, he may be showing it on the receipt only - which according to my understanding is satisfactory:

As a GST/HST registrant, you must show your customers the total tax payable or let them know that the amount payable includes the tax. You can show this to your customers on the invoice, receipt, or contract, or by displaying acceptable signs. If you show the tax on your invoice, receipt, or contract, you must show the total tax or the total of the tax rate (e.g., 5% or 13%).

Source: http://www.cra-arc.gc.ca/tx/bsnss/sm/gsthst-tpstvh/hw_t-eng.html

[iwantmyriokarma]

Fine.

The best argument that the seller is not having to pay taxes is because then he loses 13% of his gross to Canadian customers, yet gets to keep this percentage when selling to international customers. (His shipping costs are appropriate to domestic/international cost.)

There is no way this is a sensible business practice for him. The margins do not greatly exceed sales taxes.

[surplusdealdude]

Why is this any of your business?

It's HIS business, let HIM run it the way he wants to.

Concentrate on what you do and mind your own business. -------------------------------------------------------------------

It is our similarities that make us all human - it is our differences that make us all interesting

[pierrelebel]

"Let's say I observe an large, (100k+ a year) ebayer who isn't charging GST and PST, even though its obvious he must. "

I am one of those sellers with a business well exceeding $100,000 a year (on and off eBay) and do not charge consumption taxes to my Canadian customers.

"I'm guessing he doesn't report his income either. "

That is insulting! What basis could you possibly have to make such statement?

Many tax registered sellers, on eBay and in the "real" world, sell on a tax included basis or chose to absorb consumption taxes for a group of customers to generate more sales, goodwill and remain competitive with non-registered sellers.

By the way, I was recently audited for two fiscal years, both income tax and GST/HST and the auditor found my books in order. My re-assessment was $0.00. 🙂

"There is no way this is a sensible business practice for him. The margins do not greatly exceed sales taxes."

????

If your margins are less than the taxes, you should look for another business. With sales to Canadians less than 10% of my overall sales, the cost of absorbing taxes is a minuscule percentage of my overall gross margins. That's the way I do business to remain competitive. If you check my feedback rating and DSRs, obviously my customer like it.

It is important for sellers to be honest with their customers. If one is registered to collect taxes (GST/HST and/or PST), the listings should clearly say so.

[iwantmyriokarma]

That is insulting! What basis could you possibly have to make such statement?

Many tax registered sellers, on eBay and in the "real" world, sell on a tax included basis or chose to absorb consumption taxes for a group of customers to generate more sales, goodwill and remain competitive with non-registered sellers.

As 'insulting' as you find my opinion of him, it is pretty reasonable to imagine this person evades his taxes since he is already evading at least 2 of them on the federal and provincial level.


If your margins are less than the taxes, you should look for another business. With sales to Canadians less than 10% of my overall sales, the cost of absorbing taxes is a minuscule percentage of my overall gross margins. That's the way I do business to remain competitive. If you check my feedback rating and DSRs, obviously my customer like it.


Lucky you. Unfortunately, not everyone's products enjoy such a high margin. I know mine and his don't.

Again, as I explained, it is makes no sense for him to lose 13% of his gross to taxes when selling to Canadians. This would be about 30-100% of his net profit.

If your margins are less than the taxes, you should look for another business.

Or just ship to Americans, unless for some reason he doesn't need to send 13% of his gross to the government...

Why is this any of your business?

It's HIS business, let HIM run it the way he wants to.

Concentrate on what you do and mind your own business.

:^O :^O :^O

It's my business....because my business is to sell the same items as him, except I legally charge PST. I can't compete with someone whose prices are 13% lower because they illegally avoid prices.

Well everyone, looks like the thread has gone the way of the powerseller discussion board, with everyone ignoring the original post and logic, then responding to a post that exists in their mind only.

[pierrelebel]

"since he is already evading at least 2 of them on the federal and provincial level. "

Once again, YOU DO NOT KNOW THAT. You assume tax evasion. And we all know what "assume" means.

"with everyone ignoring the original post and logic,"

What logic?

[iwantmyriokarma]

It is important for sellers to be honest with their customers. If one is registered to collect taxes (GST/HST and/or PST), the listings should clearly say so.

1. He's not charging sales taxes or mentioning a tax included price.

2. Let's say you sell 10k of goods a week and you make $1500 profit on them. If you were selling taxes included, do you think it makes sense to sell the same 10k to canadians and have to remit $1300 to the government, for a net profit of $200, or sell to Americans and remit no taxes and have a net profit of $1500?

(This person charges almost the same shipping cost to both Americans and Canadians.)

How long have you been in business for exactly?

[pierrelebel]

"How long have you been in business for exactly?"

Selling stamps worldwide since 1987. Online since 1998. Registered with GST since it started in 1991. How about you?

One of your listings reads: "Canadian buyers will be charged 5% GST (or 13% HST for buyers in NS, NB and NL) and an additional 7%/8% for buyers in BC/ON. "

That puts you at a competitive disadvantage to have business locations in both ON and BC.

[iwantmyriokarma]

Yes it does but there's nothing I can do about it.

So...do you know useful the informant's line at revenue Canada is? How well do they respond?

I mean, the guy is selling 10x of the same new electronics a week. He has 6 figures in sales this year in reading his feedback history. He says he's based in Ontario. It's pretty obvious he should be charging pst/gst.

[pierrelebel]

"It's pretty obvious he should be charging pst/gst."

You don't get it, do you?

There is NO LEGAL requirements to CHARGE GST or HST. The only requirements are to file and remit GST/HST on taxable sales, depending on the province of residence of the buyer. There is also a requirement to submit an invoice or receipt indicating his GST/HST (business) registration number. For more information, check this http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/bspsbch/itc-cti/nvc-eng.html

If the guy sells $100,000 a year, based on general eBay pattern, only $10,000 of that would be in Canada and he would have to remit $500/$600 in GST/HST (depending on the percentage of sales in NL, NB and NS). No big deal. The amount of GST/HST to pay would most likely be offset by ITC resulting in a GST/HST refund sent to him. That is what happens to most sellers whose sales are mostly exported.

You have no way of knowing if he does or not file GST/HST properly. Like many other Canadian tax registered sellers, he has made the decision NOT to charge GST/HST to his Canadian customers. It costs him one half of one percent of his overall sales (500/$100,000). That is his choice.

It may be more difficult to compete with that concept for a seller whose sales are mostly within Canada.

On the other hand, it is possible (not probable) the guy is not registered to collect/remit GST/HST. If that is the case, he is losing money since he is not eligible to ITC.

[pierrelebel]

Now, I am really puzzled.

Your listings suggest you are GST/HSTregistered. Otherwise you could not charge GST/HST.

Yes, in a recent listing (180407530332), you state:
'I will ship within 2 business days after payment. I do not charge sales taxes on this item."
How is that possible?

Your opening post reads " who isn't charging GST and PST, even though its obvious he must. "

Would your question apply to your listing? If not, why not?

[coxengines]

You know, guys, instead of bashing your competitors, why don't you show some empathy and love for them, or even support them.

As Pierre has mentioned, there is no legal requirement to collect taxes, only to remit such.

We are also a seller that absorbs taxes for Canadians. Really no big deal in the context of things. If absorbing the taxes is such a big deal from a profit perspective, you are in the wrong business.

Harboring ill thoughts towards your competitors will only come back to haunt you in the long run.

Here, we support our colleagues, send them business when we don't have an item in stock and, in the meantime, actually supply some with exclusive product that we are manufacturing.

This goodwill is felt by our customers as well as our competitors. Although we began at ground zero and are the most expensive seller of the product on eBay, we outsell our closest competitor by a ratio of at least 5 to one.

What I am trying to say here is that, if your thinking is "fight" you will reap just that and you will have to dig two graves.

You are best advised to stop looking at your competitor's listings and spend that energy in making your business more successful.

Almost all our competitors have a listing violation in their listings, yet I would never dream of reporting them.

Bernie

[surplusdealdude]

It's my business....because my business is to sell the same items as him, except I legally charge PST. I can't compete with someone whose prices are 13% lower because they illegally avoid prices.

And perhaps he pays less for his items because he can buy in larger quantities. -------------------------------------------------------------------

It is our similarities that make us all human - it is our differences that make us all interesting

[iwantmyriokarma]

pierrelebel

1. As you yourself have said, a seller should charge PST/GST or state that his price is inclusive of these. This is consistent with what I have said. The seller in question is doing neither.

2. I do not need to charge sales taxes on items I have purchased for my personal use then resold. IE, people do not charge sales on their house or car, even if they own an ebay store. (This implies you could determine a few things about my lifestyle by looking through my ebay history.)

3. Again, as I have said, since I am in the market, I have good reasons to believe the seller specifically targets Canadians. Not least of which is the fact he sells in $C.

Wrong on all points.

These responses so far are pathetically low in quality. It is like trying to consult a businessman about business strategy, but you find out they don't even know how to calculate profit, as what literally what has happened in this thread. Pretty useless and especially disappointing (shocking?) when speaking to a previous tax professional.

The worst thing is you people don't even have a clue to my actual question, which was about enforcement. If you don't have an answer, at least try not to trip up the thread with nonsense.

[iwantmyriokarma]

Ok, listen up guys. I had a specific question.



Not only are most of these responses not addressing the question at all, they are making nonsensical judgments of laughably poor quality. I'd like to see how some you behave when your competitors have an unfair advantage due to illegal actions.

I could spend my evening smiting them all down, but it is a total waste of time.

[pierrelebel]

" As you yourself have said, a seller should charge PST/GST or state that his price is inclusive of these. "

I have NOT said that., You are not reading. You are interpreting.