Ebay's New Canadian Sales Tax is a scam

[twdi_22]

The only people who should be charging tax on used goods in Canada are businesses. If people are selling their used goods, they are not required to charge tax. The only exception is automobiles. A private sale of an automobile requires tax before you can register that vehicle, but that tax is paid directly to the government by the buyer.

Generally the sale of what is referred to as personal use property is not subject to GST/HST. Personal use property is an item that people own and use for their own personal use. If you sell a used personal use item then the transactions is generally not subject to GST/HST. There are, however, important exceptions to this rule. One relates to the “small supplier” threshold. If the sales of personal use property in a given year exceed $30,000 then you are required to be a GST/HST registrant and you are required to charge and remit GST/HST. The second relates to commercial property. The personal use exemption does not apply to the sale of used commercial property, which is generally always subject to GST/HST.

https://www.northernpolicy.ca/article/tax-implications-of-the-secondhand-economy-4065.asp

Thrift stores, Pawn shops, all of these places are businesses, and must charge tax. They have a GST number these taxes are paid under. If an Ebay seller is doing it as a business, they must be collecting taxes.

Ebay collecting taxes on behalf of the average joe who sells one or two things a year, is extremely shady. There's no business number it's being associated with. What Ebay is doing, is they're collecting taxes, and since there's no business associated with it, they're going to apply those taxes to their own tax debt. Which is as shady as it can get.

I don't buy from Ebay that often, but I was shocked when I went to buy a graphics card from a private seller, and there was tax being charged. Then I noticed their "new policy".

Ebay is dead in Canada.

[brettjet38]

EXACTLY...

[brettjet38]

The CRA does not consider yard sales, private sales on marketplace, any of that INCOME. It's not taxed. No law requires it to be taxed.

Wrong, so wrong...

...and BTW my BIL is really a CRA investigator, for real.

And not one comment you have posted on this thread has gotten a "Thumbs-Up" another indication of how incorrect you are in your thinking, as for the other commentators, their thumbs up indicate everything you need to know, as do mine.

Not happy, move on, move on, eBay will go on...

[brettjet38]

@mrdutch1001 "oh and BTW, folks like you have been sayin' "eBay is dead" for at least the past 12+ years" 

Actually, when I joined in 2001 , the same kinda people were saying the exact same kinda things, and 21 years later eBay is still around...

[sonometrics]

A few days ago I placed 2 separate ebay.ca orders ($15 and $75), both from vendors in China.  From what I can see on the order details, there was no tax applied / charged. 

There might not be any tax (ie GST) charged if the seller is in the US and they do not send through the global shipping program.  It looks like Ebay.ca will only add the tax (and collect it) if the seller is in Canada.  Which makes me wonder if Canadian sellers can fib about their location to ebay to work around this?

[marnotom!]

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@sonometrics wrote:

A few days ago I placed 2 separate ebay.ca orders ($15 and $75), both from vendors in China.  From what I can see on the order details, there was no tax applied / charged. 

There might not be any tax (ie GST) charged if the seller is in the US and they do not send through the global shipping program.  It looks like Ebay.ca will only add the tax (and collect it) if the seller is in Canada.  Which makes me wonder if Canadian sellers can fib about their location to ebay to work around this?

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Don't forget that the Global Shipping Program and USPS aren't the only ways to get items from the US to Canada, and those shipping methods can sometimes mean some pretty painful COD charges on top of the taxes (and possible duties) owing.

I don't think most knowledgeable Canadian sellers would want to "fudge" their location as a US one in an effort to "'help" their fellow Canadians as it would mean that their sales would then be on the radar of the IRS.  Besides, the eBay registration system is now making it just about impossible to change one's country of registration, probably for the reasons you're suggesting.

[ber820]

Is it even legal to collect GST and PST on used items that an individual sells to another?

The individual does not own a business or have tax numbers. What is going on here?

It's like a garage sale charging you GST & PST for an item. It's absolutely ridiculous!

[reallynicestamps]

The rationale is that the seller is not charging the tax. Instead the seller is using eBay and eBay's Managed Payments program to process the buyer's payment.

And it is the process  - the service- that is being taxed by the Goods and Services Tax, as well as the various formats of provincial taxes.

For "garage sales", there is no payment processor. The norm is cash.

And sellers are not required to register to collect sales taxes until they are selling $30K gross annually. By which time the neighbours have probably complained to the bylaw office about zoning infractions.

Another example would be flea markets, again usually cash, but with the advent of Square and other wireless payment processors (that term again) many flea dealers have learned that the greater sales from offering credit card use are offset by the extra work in dealing with sales taxes.

At one time eBay allowed sellers who had merchant credit card accounts to sell directly to the buyer, without Paypal or Managed Payments.  But those sellers would also be collecting sales taxes through their payment processor (ours was Moneris) .

And some flea markets don't charge the taxes separately. They basically pay the taxes from their gross and don't bother the customer with them.

A very European attitude.  One thing that startles European tourists is that North Americans do not include sales taxes in prices. It's actually one reason American tourists think European prices are high.  They think that

 a €12 widget is more expensive than a €10 widget + 20% VAT. 

[mrdutch1001]

selling/buying on eBay is not the same process as for garage sales, etc...eBay is a Marketplace facillitator whereby there is a recorded transaction between seller and buyer along with a recorded payment process-  not same as someone selling an item to another person at a garage sale where there is rarely any authorized transaction/payment process.

have you never ever purchased a used item from any used/second hand retail outlet?

where you would have had to pay the applicable taxes on any purchases from those outlets?...

used vehicles, used/second hand furniture,used sports equipment,etc,etc,etc...

so YES it is legal!...and YES eBay is required to follow the law as is now required...

BTW, this is NOT unique to eBay, this is NOT an eBay thing= this is also a requirement for all similar online selling sites.

[nocoolnamejane]

eBay is taking care of the collecting and remittance, and they do have tax numbers.

[brettjet38]

Yes, it is perfectly legal to charge tax on Used Goods every time they are sold on a Marketplace Facilitator.

[miclak_97]

Ebay Canada also charges GST/HST on shipping charges, not just the price of the item. I don't know if that is standard practice for a business or not.

[mrdutch1001]

well apparently you missed the eBay announcement  that came down 5 years ago(and most likely possible you weren't an eBay member at the time):

(and NO, this is not something unique to eBay - this is a Canadian Governemnt taxation process):

"To better reflect how we manage and operate our platform in Canada, on July 1st, 2017 we will be changing the contracting party for Canadian residents and businesses from eBay International AG to eBay Canada Limited, a Canadian corporation.

As a result, eBay users residing in Canada will begin contracting with eBay Canada Limited. This change will impact these users' User Agreement, User Privacy Notice, Billing Agreement, and other agreements with eBay.

The new contracting entity, eBay Canada Limited, is subject to Canadian tax law. As a result, sales tax (GST/HST/QST) will be charged on eBay fees starting July 1st, 2017. The applicable sales tax rate will vary by province, which we will determined based on your registered eBay address."

eBay fees are charged on the TOTAL amount of the transaction.

[marnotom!]

@mrdutch1001, I think @miclak_97 is writing from a buyer’s perspective and referring to the taxes applied to a purchase’s shipping charge at the time of the sale.

[mrdutch1001]

it's really irrelevant...buyers need to know and/or should know the taxation processes which any government implements in any facet of commerce. These taxations are not a secret...it's all out there for the general public to know...

[marnotom!]

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@miclak_97 wrote:

eBay Canada also charges GST/HST on shipping charges, not just the price of the item. I don't know if that is standard practice for a business or not.

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It's tough to know whether the GST/HST is already folded into the shipping charge on most other sites because quite often the shipping charge doesn't correspond with what the vendor actually pays the shipper.  I recently paid $7.00 to have a CD sent to me by lettermail for a lot less than that.  (This wasn't an eBay purchase.)

[morbeusfp2]

I DONT UNDERSTAND THIS PRACTICE. THE ONLY AGENCY TO MY KNOWLEDGE THAT CAN CHARGE SALES TAX AND HST IS THE CRA WHICH IS A CDN GOVT AGENCY.  I KNOW IVE IMPORTED SEVERAL ITEMS INTO CANADA LATELY. OUT OF THE THREE IVE ONLY BEEN CHARGED HST ON ONE. SO ?????. WOULD SUGGEST YOU CONTACT THE CRA. 

[blurl]

Yes, and "International Prority Shipping" is an Ebay scam too, so a Canadian resident buying from eBay often pays double the agreed price for an item, and gets the poorest possible shipping service (Pitney Bowes), taking 3+ weeks in BC. My latest purchase was on Sep 27, "customs cleared" in Toronto Oct 6, and no later tracking provided as of Friday, Oct 14 (so earliest delivery will be Monday Oct 17). And that is typical. I feel a bit sorry for vendors too, who have to reduce their prices so eBay can take its take. It's a broken system, in my opinion, that needs to be replaced.

[mrdutch1001]

well apparently you also don't understand that using all caps is very hard to read,and very unprofessional...

and just exactly what "practice" don't you understand? ...Taxes have been charged on goods for ever and ever and is dependent upon the type of goods...Imports are subject to taxation dependent upon value and category...

Most selling venues are set up to collect taxation on the TOTAL amount of the transaction.What part of that don't you understand?

[mrdutch1001]

no one is forcing you to purchase from a seller that uses the Global shipping program...that is YOUR choice...Buyers have the choice as to from whom and from where they purchase...

Buyers do have the option to ask a seller if the order can be shipped via other method...of course there is no guarantee that a seller would do that, but the buyer can ask...

and just why would you think that ..."vendors".... have to reduce their prices so eBay can take its take."?

I don't see that as a common practice...Where is the evidence of that? Sellers choose to set their prices and if they lower prices that is their choice...

[big_moose24]

And what is particuarly irksome is that the buyer (at least in Ontario) pays 13% extra, and they take out more of the earned amount because the total value is higher.  It just reduce my payout by a percent or two but who cares. 

And they do the same thing if I pay shipping that double the value of the item.

Ok, if they didn't do they maybe they would just charge a higher final value fee on the base amount but that still seems more fair...