Any sellers on .COM using a US address: Ebay not charging GST/HST for Canadian buyers

[poupas2]

This is an inquiry for any other Canadian sellers who sell on . COM using a US ship from address, who collect tax. 

I sell on . COM and .CA. Almost all sales are to the US. I have a Canadian 'ship from' address on .CA and a US 'ship from' address on .COM. I recently had a Canadian buyer purchase an item listed on .COM. I noticed that there was no charge of any GST/HST to this buyer. I went back in my records and noticed that all Canadian orders from .COM, after July, were not charged any tax(I might have had 5-6 CA orders since July).

Prior to July, when I collected my own tax, all Canadian buyers(.com and .ca) were charged the appropriate tax. As I live in Canada and the buyer lives in Canada, they should be charged tax, regardless of how/where I ship the item. The system worked properly then.

So, for me anyway, it looks like there is a glitch in tax collection on Ebays part. They collect the proper GST/HST from .CA with my Canadian address, but they are not collecting GST/HST when a Canadian buys from .COM with my US address. This is a big problem, I signed off on Ebay collecting my GST/HST, and they are not doing it correctly.

Has anyone else noticed this? Check your records.

I will have to contact Ebay about this, I just wanted to check if this was a system wide problem or just specific to me.

Thanks for your time.

[recped]

The way I understand it eBay's responsibility to collect GST/HST/PST only applies to orders that are shipped FROM Canada. This is different then their collection of EU VAT or US State Sales Tax. In theory Canada Customs are responsible to collect on shipments from outside Canada.

[flipistics]

I remember someone mentioning this a few months ago. It's not really eBay's fault as you're essentially lying (although not maliciously) about the location of the item. The unfortunate answer is that (legally) you'll probably have to eat the tax and remit it yourself. Maybe on items listed as being located in the States you could add a handling charge equal to the average tax amount for Canadian orders?

It's unfortunate that eBay doesn't allow Canadians to tick off a box that says they can ship from either side of the border.

[poupas2]

Thanks for the responses.

My issue is that this has not been a forever problem. Prior to July, any Canadian who bought from my .com with my US shipping address, were charged the appropriate tax, every time. It seems Ebay 'forgot' to implement the proper code in their transition to collect tax for sellers(even though they had it right before).

I will get Ebay on the horn to see if anything can be done. Highly unlikely I will assume.

[flipistics]

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@poupas2 wrote:

Thanks for the responses.

My issue is that this has not been a forever problem. Prior to July, any Canadian who bought from my .com with my US shipping address, were charged the appropriate tax, every time. It seems Ebay 'forgot' to implement the proper code in their transition to collect tax for sellers(even though they had it right before).

I will get Ebay on the horn to see if anything can be done. Highly unlikely I will assume.

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Do you have tax tables set up on .com?

[pjcdn2005]

Sellers don't set up tax tables since ebay is supposed to collect it. But I bet that they did have them set up when they were collecting it. Then when ebay started collecting it the tax tables weren't used and since the seller was using a US address they assumed that the no tax should be charged to Canadians.  You would think though that if the seller was registered in Canada that they would charge tax anyway.

[flipistics]

Yeah, I'm just saying he might need to set it up on .com to fix the problem. eBay temporarily disabled the tax tables (at least here in Canada) when the changes came in, and then supposedly it was reactivated a few weeks ago (not sure if it actually happened). Maybe it also deactivated them on .com during that period and erased them or something.

[poupas2]

I had all my tax tables set up, for many years. The next time I make a listing on .com, I will have a look into the tax tables and see if they can be applied at all, I will check both on .ca and .com. I highly doubt I can have a tax table set up on .com that gives the options for each individual Canadian province(maybe Canada wide).

pjcdn2005 hit the nail on the head with this comment: "You would think though that if the seller was registered in Canada that they would charge tax anyway." This is exactly how it worked before Ebay took over the tax collection.

I replied with a query on Velvets thread(Ebay tax collection questions). Lets see if they give a response.

[marnotom!]

I don't think this is a glitch.  I'm more with @recped's thinking on this.  Canada hasn't yet joined much of the western world in taxing internet purchases from outside of Canada at the point of sale.   As noted by Recped, this responsibility is currently in the hands of Canada Border Services and contracted brokers.  

If your items really are shipping out of Ogdensburg, the possibility exists that your items will be assessed for taxes and (possibly, though not likely) duty when they enter Canada, which means that if you're charging tax at the point of sale yourself, your buyers could end up being double-taxed for their purchases.

I think the "new system" is working the way it's intended.

[femmefan1946]

I'm not sure if it would come into play, but under current NAFTA our  duty free allowance is $150 and our tax free allowance is $40, while Americans have a duty free allowance of $800.

I don't think they have a tax-free allowance since they have no federal sales taxes. I could be wrong.

[marnotom!]

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@femmefan1946 wrote:

I'm not sure if it would come into play, but under current NAFTA our  duty free allowance is $150 and our tax free allowance is $40, while Americans have a duty free allowance of $800.

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I have to keep refreshing my memory on this.  It looks as though the old C$20 tax/duty-free limit still applies to any personal import sent by mail from anywhere and that applies to CUSMA imports as well.  The C$40/C$150 limit applies to couriered items imported from a CUSMA country and the item's country of origin/manufacture is irrelevant.

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@femmefan1946 wrote:

I don't think they have a tax-free allowance since they have no federal sales taxes. I could be wrong.

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If the vendor is calculating and charging "internet sales tax" on items, that would be how our US cousins get dinged on their online purchases, and there's no tax-free minimum that I know of in any of the states that levy this tax.

If the buyer makes a purchase from a vendor that doesn't charge "internet sales tax," they're expected to pay Use Tax on the item instead.

[dinomitesales]

I can't comment on why it worked the way it did before July 2022, but it seems to be working correctly now.

If you're shipping from the States then eBay won't charge Canadian buyers taxes because that's the responsibility of CBSA. As others mentioned, it would open up the possibility of them getting charged taxes at the time of purchase, and then again when it crosses the border. In European countries for example, there is a tax number that is attached to the shipment to notify customs that tax has already been paid - no such program has been instituted in Canada.

[poupas2]

That is not how it works. Canadian buyers from a Canadian seller gets charged the sales tax at the point of sale(regardless of where the product is located). Customs collects the import duty on the product, and taxes on that duty, not sales tax. If the product is coming from a different country, the seller has the option to prepay the duty charge before hand with the broker(or it gets added to their account after), or lets the customer pick up the duty charge on delivery.

Think of a Canadian drop ship website company. They take orders from Canadians, place the order from the manufacturer(China for instance), the manufacturer fulfills that order and ships the product directly to the customer in Canada. This Canadian website will be charging the sales tax on each order, even though the product is located outside Canada.

[marnotom!]

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@poupas2 wrote:

That is not how it works. Canadian buyers from a Canadian seller gets charged the sales tax at the point of sale(regardless of where the product is located). Customs collects the import duty on the product, and taxes on that duty, not sales tax. If the product is coming from a different country, the seller has the option to prepay the duty charge before hand with the broker(or it gets added to their account after), or lets the customer pick up the duty charge on delivery.

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The way you have your .com listings set up right now is that your items are listed as being shipped directly from NY state via USPS and they show up in search as "from [the] United States."  Just like those of a US seller shipping out of the US, your items are treated by "the system" as going through the mail system, passing through customs and possibly getting assessed for taxes owing by the importer (buyer).

There's nothing on your .com listing pages to suggest that you're a Canadian seller, so "the system" treats your .com purchases from Canadian buyers the same as those from a US-based seller using the postal system.

I don't know how you were able to charge taxes on your .com sales to Canadian buyers prior to July 2022, but if you were using tax tables and they're not working now, what you may be wanting eBay to do may be currently beyond the capabilities of the site's programming.

[dinomitesales]

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@poupas2 wrote:

Customs collects the import duty on the product, and taxes on that duty, not sales tax. If the product is coming from a different country, the seller has the option to prepay the duty charge before hand with the broker(or it gets added to their account after), or lets the customer pick up the duty charge on delivery.

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Sorry, this isn't correct. If customs is going to assess a package they are automatically charging GST/HST + PST/QST (if applicable) on the declared price of the product converted into Canadian dollars, plus a $9.95 handling fee. Then, if the item is dutiable, they will tack on an additional percentage for duty.

I've worked as a Canada Post(al) clerk for close to a decade now and I've seen thousands of E-14 customs delcarations attached to packages (the yellow ones that are prepared and applied by CBSA).

The only way an international seller has the option to prepay duty/import fees is if they're using a courier that allows them to do so; items shipped through a national postal service have no such option.

[recped]

@dinomitesales  is correct!

@poupas2is NOT correct!