Taxable item

[coins.4.fun]

How eBay would know if a specific item is taxable?

I'm selling coins. Some of them GST/HST taxable, some  are not.  Some are taxable PST in some provences.

Thanks.

[coins.4.fun]

Bump

jasmen@ebay 

velvet@ebay 

[coins.4.fun]

I see absolutely no response from jasmen@ebay nor velvet@ebay, who supposed to answer all questions and concerns.

That make me think eBay is well aware about items with zero rate GST/HST.

However, they're going to ignore as it is too complicated to implement and they just hope nobody's going to sue them.

[marnotom!]

There are quoted responses from eBay’s “tax team” on other threads that state that it’s not the goods that are getting taxes collected in this arrangement but the transaction.

What we don’t know at this point is if “transaction taxes” are equivalent to “goods taxes” for eBay sales.

[coins.4.fun]

“transaction taxes”? What does it even mean? Gee...

Can they tax the air I breath? They can declare it to be a part of a transaction.

marnotom!, could you point me out where eBay’s “tax team” mention that?

[marnotom!]

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@coins.4.fun wrote:

“transaction taxes”? What does it even mean? Gee...

Can they tax the air I breath? They can declare it to be a part of a transaction.

marnotom!, could you point me out where eBay’s “tax team” mention that?

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velvet@ebay, one of the two eBay staff members who act as a liason between this discussion board and eBay HQ, has been posting quotes she's been getting from the eBay tax team on this subject.  There's one example in this thread, a search should reveal a few others:

https://community.ebay.ca/t5/Canadian-Sales-Tax/Canadian-for-used-item/m-p/478597#M283

[coins.4.fun]

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The requirement for taxation is based on the transaction, not the item. The buyer in each individual transaction separately pays the GST/HST/QST/PST as applicable.

That something new in taxation. The buyer pays taxes on purchase of goods (tangible or not), not on being participant of a transaction.

[marnotom!]

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@coins.4.fun wrote:That something new in taxation. The buyer pays taxes on purchase of goods (tangible or not), not on being participant of a transaction.

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Maybe, maybe not.  It's called the Goods and services tax, so maybe there was already an "out" in place there.  Also consider that it's called the Harmonized Sales Tax, and not the "Harmonized Goods Tax."  Some services are already subject to tax, such as telecommunications.

Found this guvmint page while looking for more information on this development:

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/digital-ec...

It doesn't mention anything specific about transactions being charged tax, but it does suggest that eBay and the feds had to work this out during the course of the past year.  I'm guessing the problem is similar to one with the GSP in that eBay doesn't actually know in all cases what's being sold unless the item has a UPC or SKU in Item Specifics that can be referred to, otherwise the best it can do is refer to the category that the item was listed in, and that's up to the seller.

[coins.4.fun]

Yes, I didn't mention services as eBay doesn't sell services to Buyers, it sells service to Sellers and it charges taxes. That's not problem.

The problem is with specific items sellers sell, which have different tax rates and should be differentiated.

You, I, other people could have as many guesses as we want.

However, I would like to hear direct answer from eBay's jasmen@ebay and velvet@ebay, but they keep they mouths shut, though I see they do provide answers in other threads.

[reallynicestamps]

https://community.ebay.ca/t5/Canadian-Sales-Tax/Canadian-for-used-item/m-p/478597#M283 

Post #3

https://community.ebay.ca/t5/Canadian-Sales-Tax/What-about-businesses-under-the-threshold-who-do-NOT...

Also post #3

https://community.ebay.ca/t5/Canadian-Sales-Tax/Canadian-Sales-Taxes-Questions/m-p/478143#M4

Posts # 9,10,45

And of course the Wednesday Chat would be open now.

[pjcdn2005]

On .com ebay does not charge tax on non taxable items in specific states.  The item does have to be in the correct category.  I don't know if that's how it will work here but I don't think that it is safe to assume at this point that everything will be taxed.  However, the gsp has always seemed to charge gst on bullion coins even though there is no gst or duty on it.

[marnotom!]

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@pjcdn2005 wrote:

On .com ebay does not charge tax on non taxable items in specific states.  The item does have to be in the correct category.  I don't know if that's how it will work here but I don't think that it is safe to assume at this point that everything will be taxed.  However, the gsp has always seemed to charge gst on bullion coins even though there is no gst or duty on it.

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You're describing two different scenarios where taxes are applied, though.  In the case of the sales to the US, you're saying that the tax is charged on the item.  What's apparently in place for eBay sales within Canada is that tax will be applied to the transaction, and what we don't know yet is if "transaction tax" is the same as "tax on the item".  I tend to operate under the philosophy of "hope for the best but expect the worst," so my musings aren't assumptions but my way of saying,  "Brace yourself, folks.  This might hurt."

As for GST "seemingly" being charged on bullion sales, as we don't know the makeup of the "import charges," it may well be other charges that are being applied to those sales as GSP "import charges" aren't just based on taxes and duties.  I know you know that, but I'm just saying that for others reading these posts.

When I last went through the Amazon checkout for funsies last week, I found it interesting that their line items for GST and PST (I'm in British Columbia) were described as "estimated."  I guess that's an out for them in the event that those taxes are being charged incorrectly or inappropriately.

Apologies if I seem confusing or inconsistent on this.  You can see my thought process developing on this over the course of this thread and others.

[reallynicestamps]

as we don't know the makeup of the "import charges," it may well be other charges that are being applied to those sales as GSP "import charges" aren't just based on taxes and duties.

It would be important to remember that in the specific case of the GSP that the Buyer does not pay duty and sales taxes.

Instead the GSP/Pitney Bowes collects a "fee" from the buyer and uses it to pay applicable duty and tax.

The buyer is not paying duty.

Yes, it's a technicality.

Yes, if there is a refund from GSP, those import fees are (I believe) also refunded by GSP. If the buyer were being refunded by a US seller, the buyer would be responsible to recoup the duty and tax personally from CBSA.

AND

This is important.

GSP specifically says it deals with seller to buyer and NOT seller to reseller. It does NOT want to deal with business to business transactions and will NOT be cooperative if there is a problem.

That US sellers don't realize this means that Canadian resellers should be looking elsewhere for product, or be contacting the US seller to make other non-GSP arrangements.

Above all,  we must keep in mind that the GSP is a Seller Protection program and that it neither offers nor wants to offer anything to buyers.

[jasmen@ebay]

Hey @coins.4.fun 

Beginning July 1, 2022, eBay will be responsible for the configuration and taxation of all items sold to purchasers in Canada – including exempt items. If an error is made, eBay will refund the buyer any tax over-collected and will be responsible for any tax under-collected. eBay is utilizing third party software and taxability rules to ensure the proper tax treatment of all items listed on the site. 

Thanks!

[coins.4.fun]

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jasmen@ebay wrote:

Hey @coins.4.fun 

Beginning July 1, 2022, eBay will be responsible for the configuration and taxation of all items sold to purchasers in Canada – including exempt items. If an error is made, eBay will refund the buyer any tax over-collected and will be responsible for any tax under-collected. eBay is utilizing third party software and taxability rules to ensure the proper tax treatment of all items listed on the site. 

Thanks!

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jasmen@ebay wrote:eBay is implementing and utilizing third-party taxation systems to differentiate tax exempt goods from each other. We will have an entire list of exempt items and rules at the Federal and Provincial level.  

How would eBay figure out if certain item is GST/HST exempt? How you would match up an eBay item against exemption list? I sell coins and I rely on manufacturer's decision to tax or not to tax. How you would do that? You don't have enough information to make such decision.

[marnotom!]

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@coins.4.fun wrote:

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jasmen@ebay wrote:

Hey @coins.4.fun 

Beginning July 1, 2022, eBay will be responsible for the configuration and taxation of all items sold to purchasers in Canada – including exempt items. If an error is made, eBay will refund the buyer any tax over-collected and will be responsible for any tax under-collected. eBay is utilizing third party software and taxability rules to ensure the proper tax treatment of all items listed on the site. 

How would eBay figure out if certain item is GST/HST exempt? How you would match up an eBay item against exemption list? I sell coins and I rely on manufacturer's decision to tax or not to tax. How you would do that? You don't have enough information to make such decision.

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Jasmen's no longer working the eBay boards, but I think the quote she received from the "tax team" (that's why it's in italics; the words aren't hers) covers it pretty well.  The matching is likely done by this third party software which will probably have to refer to the item category and any item specifics the seller provides on the listing page.

As most new rollouts or initiatives by eBay are rarely glitch-free, I suggest you and all active sellers expect a rocky first two or three weeks as the bugs get fumigated out of this new taxation process.  It cuts down on the nasty surprises.

The upside is that this taxation process may lead to some coin sellers cleaning up their act or leaving the site, as my searches have found stuff that's in the bullion category that doesn't meet the definition as I understand it. but I still feel confused.  Maybe you can help here.  Is something that's 94% almost-pure gold and 6% other almost-pure metals considered to be "bullion"?

[lotzofuniquegoodies]

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@marnotom! wrote:

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@coins.4.fun wrote:

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jasmen@ebay wrote:

Hey @coins.4.fun 

Beginning July 1, 2022, eBay will be responsible for the configuration and taxation of all items sold to purchasers in Canada – including exempt items. If an error is made, eBay will refund the buyer any tax over-collected and will be responsible for any tax under-collected. eBay is utilizing third party software and taxability rules to ensure the proper tax treatment of all items listed on the site. 

How would eBay figure out if certain item is GST/HST exempt? How you would match up an eBay item against exemption list? I sell coins and I rely on manufacturer's decision to tax or not to tax. How you would do that? You don't have enough information to make such decision.

---

Jasmen's no longer working the eBay boards, but I think the quote she received from the "tax team" (that's why it's in italics; the words aren't hers) covers it pretty well.  The matching is likely done by this third party software which will probably have to refer to the item category and any item specifics the seller provides on the listing page.

As most new rollouts or initiatives by eBay are rarely glitch-free, I suggest you and all active sellers expect a rocky first two or three weeks as the bugs get fumigated out of this new taxation process.  It cuts down on the nasty surprises.

The upside is that this taxation process may lead to some coin sellers cleaning up their act or leaving the site, as my searches have found stuff that's in the bullion category that doesn't meet the definition as I understand it. but I still feel confused.  Maybe you can help here.  Is something that's 94% almost-pure gold and 6% other almost-pure metals considered to be "bullion"?

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2 Parts of all this are very baffling. First eBay is charging tax based on the transaction...Not the doo dad being sold. Secondly the tax is paid based on the buyers location not where it is sold from. (Because mail/courier is involved and its not in person?) If I go to Ontario I would pay provincial tax and GST. Same thing in reverse. Someone coming to Alberta would pay local tax (as applicable). They would never ask where I am from. Not sure if this is all splitting rabbits or legal gobblely **bleep**. However one tries to make sense of it, it is very difficult to get a mind wrapped around the consequenses of this mess.

-Lotz

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[marnotom!]

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@lotzofuniquegoodies wrote:

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Two parts of all this are very baffling. First, eBay is charging tax based on the transaction, not the doo dad being sold. Secondly, the tax is paid based on the buyers location not where it is sold from. (Because mail/courier is involved and its not in person?) If I go to Ontario I would pay provincial tax and GST. Same thing in reverse. Someone coming to Alberta would pay local tax (as applicable). They would never ask where I am from. Not sure if this is all splitting rabbits or legal gobblely **bleep**. However one tries to make sense of it, it is very difficult to get a mind wrapped around the consequenses of this mess.

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Consider that this method of allocating taxes for online purchases is what's done with "internet tax" in the United States.

Also consider that a strictly brick and mortar retailer who doesn't have a presence outside of the province wouldn't be set up to collect another province's sales tax or ensure that the provincial part of the HST charged goes to a province other than their own.

Probably the best way to look at it is if you imagine that the HST was a "thing" in all ten provinces and the only "thing."  The version of the HST charged and the federal/provincial split being based on the buyer's location might make more sense to you.

[lotzofuniquegoodies]

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@marnotom! wrote:

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@lotzofuniquegoodies wrote:

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Two parts of all this are very baffling. First, eBay is charging tax based on the transaction, not the doo dad being sold. Secondly, the tax is paid based on the buyers location not where it is sold from. (Because mail/courier is involved and its not in person?) If I go to Ontario I would pay provincial tax and GST. Same thing in reverse. Someone coming to Alberta would pay local tax (as applicable). They would never ask where I am from. Not sure if this is all splitting rabbits or legal gobblely **bleep**. However one tries to make sense of it, it is very difficult to get a mind wrapped around the consequenses of this mess.

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Consider that this method of allocating taxes for online purchases is what's done with "internet tax" in the United States.

Also consider that a strictly brick and mortar retailer who doesn't have a presence outside of the province wouldn't be set up to collect another province's sales tax or ensure that the provincial part of the HST charged goes to a province other than their own.

Probably the best way to look at it is if you imagine that the HST was a "thing" in all ten provinces and the only "thing."  The version of the HST charged and the federal/provincial split being based on the buyer's location might make more sense to you.

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https://www.cbc.ca/news/business/niagara-falls-tourism-fee-marketplace-1.4001972

or the lyrics to Taxman by The Beatles.

-Lotz

[coins.4.fun]

To consider to be bullion it has to be made of pure metal.

[tch_ca]

No one really knows hopw eBay is going to handle this. To exempt by category is difficult since by defenition most modern collectible coins from RCM are 9999 purity (be defenition bullion) and exempt. Those coins don't generally get listed under the bullion category since they are from the mint's collectible tier and generally sell at higher prices than average bullion. Saying that (I know it's a shocker) but the CRA does not care if a retailer overcharges tax as long as they remit it to the CRA. In reality eBay can charge tax on anything it wants and the burden falls on the buyer to hound the CRA to get their taxes back.