US buyer, no tax calculated, but shipping to Canada no tax paid

[egzatek]

Hello,

Just sold an item.  Buyer is from USA with a USA address, so we do not charge taxes to US buyers, he pays right away but has he pays through Paypal he enters a Canadian shipping address, thus bypassing taxes. 

If we send to Canada we need to charge taxes, but buyer has not paid them, so i am stuck with paying the taxes for him ?

And NO i will not make that sale "under the table", our system registers the sale and shipping to BC the buyer should pay BC taxes.

Is there anything I can do ?

Thank you

[pierrelebel]

You should contact the buyer and explain your terms are clearly stated in your listings:

"We are a registered business in Canada so applicable sales taxes do apply to Canadian customers."

In your message, advise that a PayPal invoice will be sent for the appropriate GST/PST (12%) applicable to his BC address.

Send the PayPal invoice a few hours later to assure he receives your message before the PayPal invoice.

To send a PayPal invoice, log on at PayPal and click on the Send Invoice link.

It is quite possible the buyer was not intending to avoid paying Canadian taxes but using a US Washington State (near the border) mailing address to buy from US sellers not shipping to Canada.

[egzatek]

Thank you Pierre

[ricarmic]

As a note, I would consider the cost of eating the taxes vs risk of getting low DSRs from the buyer..... if it is not very much $ it might be better to just eat the taxes and block the buyer AFTER you get feedback from them.....

[egzatek]

Good point also Ricarmic

[cumos55]

Calculate the tax as part of the price plus shipping

Tax = 0.12 divided by 1.12

Also look at this one tax as if it is paid by all buyers in 2013.

Looking at that extra cost, spread across all sales for 2013,  makes it much more tolerable....

If the tax is $1.00, spread across 100 sales... that is a penny a sale

[egzatek]

Ok,

Happened again with another part I just sold. Offer Made, offer accepted then I send the invoice this morning at 8h30.

E-Bay address in NY State (confirmed in e-mail i receive (Your eBay item sold) just like last nights e-mail)

Got a message back a few minutes ago from Buyer telling me it should be sent out in Montreal and to please re-send invoice.

In that case I was lucky that my buyer asked for another invoice, cause he could just have paid the invoice through Paypal and change is shipping address on Paypal and no tax would have been charged.

Is there anyway to prevent this (e-bay address vs Paypal new ship to address), i mean from my side ?

[femmefan1946]

I suppose that you could ask every customer where they will be wanting the item delivered before you give a quote. It would probably confuse most of your customers, of course.

How much actual money are we talking here? $10? $100? Is eating the tax occasionally worth making the sale? Is the possibility of low DSRs worth collecting the tax?

Is there some reason why you are attracting Canadians with US addresses? Or are these the first two this year?

[rosscd57]

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@lithoservice wrote:

Ok,

Happened again with another part I just sold. Offer Made, offer accepted then I send the invoice this morning at 8h30.

E-Bay address in NY State (confirmed in e-mail i receive (Your eBay item sold) just like last nights e-mail)

Got a message back a few minutes ago from Buyer telling me it should be sent out in Montreal and to please re-send invoice.

In that case I was lucky that my buyer asked for another invoice, cause he could just have paid the invoice through Paypal and change is shipping address on Paypal and no tax would have been charged.

Is there anyway to prevent this (e-bay address vs Paypal new ship to address), i mean from my side ?

You don't have a choice - you have to ship to the PayPal address or you are not covered with PayPals Seller Protection. Any time someone wants me to ship to a different address - I just quote the above and the problem is usually solved.

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[egzatek]

Rosscd57 : I know i do not have a choice about shipping to Paypal address and always do ship to that one.

Femme : It is not the 2 first times i've seen that, although before right off the bat people had a US billing address and a Canadian shipping address right in e-bay and that didn't cause any problems.  Some items we sell are over 1000$ so yeah eating taxes in those instances is hurting.  As for why we attract those US customers with Canadian address, my guess is proximity to border and being able to drive through customs in a car and not pay duties.  All of our items have a buy it now feature, so I do not quote the items

I just find weird that there is no "red flags" lifting when ship to address in paypal differs from the ship to address in E-bay. 

Like we are talking about taxes now, but same issue would arise with shipping costs for someone with an E-bay ship to address around the corner, so calculated shipping cost would be X, then he pays through Paypal and puts on a different ship to address (lets say for example purpose accross the country, or accross the border) which would come up with a much higher shipping cost....would you "eat" that difference too ?  If the item is high value maybe, but if it's a low value item like a 20$ thingy and the shipping cost difference is 10$ that would be problematic.

Still, i just wonder why it can happen.

Have a nice day

[cumos55]

If this appears to be a problem... Why not make note of this in your listings.

Buyers with a US address  who ask for shipping to an address in Canada, will be charged appropriate GST, PST, or HST.

Or

State  that the address  on the invoice must be the address the purchased item is to be shipped, and indicate the additional cost of GST/HST  and perhaps PST if necessary

Put it right at the top of your description section.

It is not a big problem  at a low sale price...

But definitely needs to be addressed  for high priced items.

You might also consider adding a section in the description  indicating potential costs.

Duty to the US

GST

HST based on province of purchaser  and then PST  if important...

The US buyers night look at saving duty... However...  GST/HST may be a critical factor as well

Also  you may be caught in a situation  where a buyer lives in Canada  and buys with a US address..... as many US sellers will not ship to Canada.  

Many of your items are unique... Your buyers might be buying many items from US sellers....  and then they buy from OP using the US address....

[egzatek]

Hello Cumos, 

Yes we do have on our listing :

Payment Terms

We are a registered business in Canada so applicable sales taxes do apply to Canadian customers.

Might be put a bit clearer saying to Canadian Shipping addresses instead of cutomers. 

As for potential costs it it clearly stated :

All shipments outside of Canada require a contact phone number. International customers are responsible for all custom fees, import taxes and other fees applied by their respective countries.  All custom, duty, brokerage fees are the responsibility of the buyer.

But I agree that for taxes it should be made clearer, thank you Cumos.

Guess auto-calculation of shipping costs according to location is a great tool, but my real question is why is it possible for a buyer to buy an item with an X amount of shipping and then go to paypal, use pay for that item and change shipping address, thus changing seller's shipping cost.

[pierrelebel]

"my real question is why is it possible for a buyer to buy an item with an X amount of shipping and then go to paypal,"

At one time, in "Preferences", sellers could select to allow buyers to change the shipping charge.  Many years ago I did to allow buyers purchasing multiple items to change the shipping charge.  Later on I went with a "free shipping" policy and no longer needed that preference.

I just checked my preferences and, quite frankly, cannot find where a seller allows a buyer to change the shipping charge.  It may be there but I cannot find it and "customer service" help pages were of no help at all - as usual.

You may have to call eBay on that one.

[egzatek]

Hello Pierre,

A preference that would allow buyers to change shipping charges in my opinion would be attrocious , sellers would have to fight all the time with buyers and e-bay to justify that what the buyer paid is not what the cost is, unless i am mistaken and do not understand what it was.  And I also do not see that preference in my settings.

You are making me think about going "free shipping" (nothing is ever free) though, since most of our items have a shipping cost between 9 to 18$ it would be easy to put an average cost and use that in prices.  For larger items it could stay the same.

Thank you Pierre for making me think.

[ricarmic]

A note about what I do, my stuff is free shipping to USA (I only sell on .COM) but I charge fees to Canadians and International - to help with the taxes (Canadians) or the higher shipping for the international folks. An advantage of free shipping is the buyer has no idea how much you assigned for it within your cost, so you can use it to build in allowance for loss etc too, assuming you have room in your margins to do that....