Question about native Canadian tax policy

[onestopjewelrysupply]

I have a question about Native Canadian tax policy.

A customer just purchased several items from me and made a note saying that she is a status native & reside on Rama First Nation reserve in Ontario, and she asked for refund of tax

The situation is all my prodcuts already include taxes. normally at the year end, I calculate total Canadian sales and then I sorted each province tax rate and paid Revenue Canada the tax I collected. But what would I do in this situation?

Since my price already includes tax, do I still calculate the tax based on the total amount and refund to her,then claim that tax from Revenue Canada later on? I'm very confused as its my first time seeing this.

Any help would be greatly appreciated!

[toby_le_pue]

If you absorb the tax in your listing I don't see where your customer would be entitled to any refund.

Even if your customer did pay any tax then I believe they would have to send any receipts

to the government to get any refund.

[onestopjewelrysupply]

I used to work in a grocery store and had native Indian customer showed their tax exampt card, they didn't have to pay any tax.

Because it's an online store, so I'm not sure how it works. If I set my listings with additional tax rate, then I wouldn't have to charge her tax. but I'm not sure what I'd do in this situation. If I tell her my products already include tax, then she'd ask me to refund her tax anyways? So confused!

[marnotom!]

See if this page helps:

http://www.fin.gov.on.ca/en/guides/hst/80.html

This section is probably the most relevant to you:

Vendors are not allowed to provide the point-of-sale exemption for qualifying property or services when purchased via the Internet or through other distribution channels for which the presentation of a Certificate of Indian Status card to verify eligibility is not possible. In addition, the point-of-sale exemption will not be credited on goods imported by mail or courier.

When Status Indians, Indian bands and councils of an Indian band acquire qualifying property or services through these distribution channels, they may claim a refund from the Ontario Ministry of Finance of the eight per cent Ontario component of the HST paid.

[femmefan1946]

By the way, the same policy applies to Diplomatic tax exemptions. Living in Ottawa, we get a lot of those in our store.

Basically, we just tell diplomats to save up their receipts and send them in at the end of their fiscal year.

[onestopjewelrysupply]

Thank you for the reply. But if my order already include tax. The receipt won't show any tax amount. Should I create a differnt invoice with the correct tax amount?

[surplusdealdude]

That would be a nice gesture for the customer, so I'd do it.

[marnotom!]

You could probably just add a line or two on the bottom of the invoice stating the portion of the total that's the HST the way it's done with gasoline or movie theatre receipts.  Just make sure your tax number is on the invoice as well.

[brandeentertainment]

If tax is included and not mentioned save yourself the headache and say they are tax free... Otherwise you will need to get there status card number and this and that ...just a hassle for nothing...

[nuvistors]

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@onestopjewelrysupply wrote:

Thank you for the reply. But if my order already include tax. The receipt won't show any tax amount. Should I create a differnt invoice with the correct tax amount?

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If you are not registered to collect GST/HST then  the amount of tax  is not shown on the invoice.

If you are registered then you may send her an invoice with the amount of tax showing.

If you show the amount of tax you are expected to be remitting that amount to  the government.

[pierrelebel]

"But what would I do in this situation?"

Since you are registered with GST/HST, you should be including your GST/HST registration number on every invoice even if you are including the tax in your selling price.

It does not really matter if the buyer is Native or not. The same situation applies to all buyers who may be GST/HST registered and purchase your items for their business.  On both counts, they are entitled to a refund of the GST/HST included in your prices.

The method of tax rebate (or ITC) calculation is not your concern.  The buyer should take care of that. Using Ontario as an example (HST 13%), a Native claiming a tax rebate or a GST/HST registered business claiming ITC would claculate the tax as 13/113 of the selling price.  On a $100 transaction (tax included), the amount of tax calculated by the buyer would be $11.50 (same as selling for $88.50 and adding 13% HST).

To answer this specific inquiry, the buyer should know better than asking you for a tax refund. Simply advise the buyer of your GST/HST registration number so a tax refund can be claimed by the buyer.

[anguscoinshop]

This topic is about natives not diplomat. Stay on the ball.

[nuvistors]

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@angus_coin_shop wrote:

This topic is about natives not diplomat. Stay on the ball.

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Since you are registered for GST/HST  you should be showing tax as a separate entry on every invoice  whether it is to diplomats or not.

[cumos55]

Quote    "you should be showing tax as a separate entry on every invoice"

I sell books   which are exempt from PST and the provincial component of HST.... a point of sale rebate.

GST as well as HST  are applied to postage....

So for a buyer from Ontario HST is 5 % for books,  while it is 13 % for postage

eBay provides an invoice option that does not allow me to apply  a tax percentage separately for books as opposed to postage..

Hence  on each invoice it is necessary for me to state ..

The applicable rate for PST and GST/HST are included in all prices..

and if necessary....  the buyer can calculate how much GST or HST was paid with each transaction... 

I am not the only GST/HST registered seller on eBay that has to do this...

[michaelbb2]

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@cumos55 wrote:

Quote    "you should be showing tax as a separate entry on every invoice"

I sell books   which are exempt from PST and the provincial component of HST.... a point of sale rebate.

GST as well as HST  are applied to postage....

So for a buyer from Ontario HST is 5 % for books,  while it is 13 % for postage

eBay provides an invoice option that does not allow me to apply  a tax percentage separately for books as opposed to postage..

Hence  on each invoice it is necessary for me to state ..

The applicable rate for PST and GST/HST are included in all prices..

and if necessary....  the buyer can calculate how much GST or HST was paid with each transaction... 

I am not the only GST/HST registered seller on eBay that has to do this...

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So do you raise your price and shipping to include the tax amount or do you just absorb the cost?  How do you figure out the tax when you have to remit? 

[lady.stark]

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@michaelbb2 wrote:

So do you raise your price and shipping to include the tax amount or do you just absorb the cost?  How do you figure out the tax when you have to remit? 

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I am not Cumos, so I can't talk for him, but I think Pierre explained it really well in message #11.

[klcarrie]

Online retailers such as amazon.ca and bestbuy.ca require Status Indians submit to the vendor proof of status (e.g. image of back and front of Status Card) along with proof that items were purchased for delivery ON RESERVE (address on reserve, any reserve; not just the Indian's home reserve). 

With that information the vendor's can submit a refund of tax portion of the purchase back to the method of payment. 

Else Status Indians collect receipts for submission to respective governments for a refund of tax paid. 

[femmefan1946]

ZOMBIE THREAD FROM 2013

@happy_pigeon

Th problem with zombie threads is that the advice and information may be out of date or incorrect.

[lotzofuniquegoodies]

Another problem with ZoMbIe ThReDs is usually anyone doing a search in the discussion database for their particular situation, they are the first thing that appears.

-Lotz

[momcqueen]

Due to Best Match being the default and the old threads are the ones with the most comments.