UPS Shipping from Toronto to USA - Duties and Taxes?

[rodneyc8063]

Hopefully a quick question that I can get some help on

I am a hobby seller on eBay selling odds and ends, and most recently sold an old cell phone of mine to a buyer in the USA.

I was looking into shipping options and noticed that UPS actually has a really good rate compared to Canada post, but got a bit stuck on how to fill out the shipment.

In the past when I had things shipped FROM US to Canada - I would always get hit with nasty customs/brokerage/duties fees so I avoid UPS in general when GETTING a shipment.

When shipping from Canada TO the US, I noticed that there is now an $800 de minimis threshold?

https://www.ups.com/us/en/services/know ... 7032ea0ad8

My cell phone is worth like $300 so definitely not near this threshold, so it sounds like for my buyer they would not get dinged any customs/brokerage/duties.

But then I also have an option to mark the item as a "gift" - Which apparently has a different threshold of a $100?

So I am a bit confused on how best to mark this item, to avoid having the buyer pay for any stupid UPS customs/brokerage/duties fees.

Any help would be appreciated

[marnotom!]

Don't worry about the "gift" designation.  The item isn't a gift, so just forget that part.

The United States does indeed have a US$800 de minimis for casual imports such as your cell phone, but it only applies to duty.  What you need to concern yourself with is whether the buyer is in a state that charges internet sales tax.  eBay will have charged the tax to the buyer at the point of sale, so I would be concerned about the possibility of the buyer getting charged tax again.  There's likely somewhere in UPS's customs documentation where you can indicate that IST has been already paid by the importer, but I haven't sent anything to the United States by UPS in a long time so I can't give you any leads here.

[pjcdn2005]

As already noted, your buyer won't pay duty on a $300 item.  US customs does not charge tax on any imported item as sales tax is  a US state responsibility. There is no federal government sales tax in the US.

[pjcdn2005]

It looks like your listing specifies that you will be using Canada Post.  Unless your buyer agrees to the change of shipper, it would be best to stick to using the mail service. Some buyers dislike couriers so it is usually best to stick with the shipper that you advertised as using.

[recped]

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@pjcdn2005 wrote:

It looks like your listing specifies that you will be using Canada Post.  Unless your buyer agrees to the change of shipper, it would be best to stick to using the mail service. Some buyers dislike couriers so it is usually best to stick with the shipper that you advertised as using.

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"some buyers" should probably read "some Canadian buyers".  They dislike it because of the associated extra fees but with a Canada  to US shipment below US$800 there are no extra fees.

Nothing wrong with asking the buyer before making the change but I doubt you will get resistance unless the buyer ONLY has a PO Box.

One thing is almost certain, shipping via UPS (even UPS Ground) will be faster than Canada Post.

[pjcdn2005]

 Actually I've read quite a few post on the US boards from  buyers who have said that they have had nothing but problems with UPS and/or Fedex. Or course some say that about USPS too so I think its always best to check with the buyer just in case.

[recped]

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@pjcdn2005 wrote:

 Actually I've read quite a few post on the US boards from  buyers who have said that they have had nothing but problems with UPS and/or Fedex. Or course some say that about USPS too so I think its always best to check with the buyer just in case.

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Everybody is grumpy about everything on the eBay boards and all you ever see is the grumpiest of the grumpiest.

[marnotom!]

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@pjcdn2005 wrote:

As already noted, your buyer won't pay duty on a $300 item.  US customs does not charge tax on any imported item as sales tax is  a US state responsibility. There is no federal government sales tax in the US.

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I'm pretty sure that UPS and its ilk would advance provincial sales taxes in cases where an item is sent to a Canadian province where provincial sales taxes are due, though.  Items sent by mail get hit by provincial sales taxes if assessed by CRA.

An item sent by UPS would have duties advanced by UPS or the broker contracted to clear the item through customs.  I'm just not sure if it would do the same for taxes in the United States.  It was a federal Supreme Court decision (South Dakota vs. Wayfair) that upended the whole issue of states being able to collect sales taxes on online sales outside of state borders, after all.

[pjcdn2005]

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@recped wrote:

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@pjcdn2005 wrote:

 Actually I've read quite a few post on the US boards from  buyers who have said that they have had nothing but problems with UPS and/or Fedex. Or course some say that about USPS too so I think its always best to check with the buyer just in case.

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Everybody is grumpy about everything on the eBay boards and all you ever see is the grumpiest of the grumpiest.

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Lol I can't disagree with that.

[pjcdn2005]

I am sure that it is not the same in the US as the federal government there does not collect state sales tax.   If that state did not require marketplaces to collect tax upon payment, it would be the buyers responsibility to pay the tax on their own, just like they were supposed to do previously.

[marnotom!]

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@pjcdn2005 wrote:

I am sure that it is not the same in the US as the federal government there does not collect state sales tax.   If that state did not require marketplaces to collect tax upon payment, it would be the buyers responsibility to pay the tax on their own, just like they were supposed to do previously.

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UPS isn't the federal government, though, and as it (or its brokers) are advancing government monies on the importers' behalf, I'm wondering if they're beholden to advance Internet Sales Tax as UPS has operations in the states where IST is a "thing".

[byto253]

I don't know how UPS works going from Canada to the US and if they have extra brokerage charges in that direction.  I am suspicious whenever a courier is much cheaper than a postal service.  You may wish to call UPS to check for the price level of service you are looking at.   Hopefully the UPS agent knows for sure....

That said, cell phones are a higher incident category, so for your own protection I would stick with the shipping service indicated, which was "Canada Post Expedited Parcel - USA".   I would not introduce complications like requesting a different shipping service from the buyer. Keep it simple and exactly as listed. 

The shipping charges of $22 flat may be a little short, depending on your and the buyer's location, but that is part of selling.  You could have done a calculated shipping cost based on location, so the flat rate is at the seller's risk.   Sometimes we make the trade-off to do a simpler listing and absorb a bit later, which on a good priced item like this makes it easier to do.   

Sorry to say but the research on shipping options is something to done before listing, or in the listing indicate a generic shipping method such as "standard shipping" that allows 1 to 10 days and does not say who the shipper is.  

[reallynicestamps]

, I'm wondering if they're beholden to advance Internet Sales Tax as UPS has operations in the states where IST is a "thing".

The Internet (state) Sales Tax would have been charged by eBay when the buyer paid his eBay invoice.

So the main question would be where on the UPS form does the seller/sender indicate that this has been paid.

Certainly if that is not on the packing slip the seller includes, it should be noted separately.

Even if that means getting out your favourite Sharpie and writing that information on the parcel/label for the use of UPS.

With Canada Post, this has not yet been a problem.

[pjcdn2005]

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@marnotom! wrote:

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@pjcdn2005 wrote:

I am sure that it is not the same in the US as the federal government there does not collect state sales tax.   If that state did not require marketplaces to collect tax upon payment, it would be the buyers responsibility to pay the tax on their own, just like they were supposed to do previously.

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UPS isn't the federal government, though, and as it (or its brokers) are advancing government monies on the importers' behalf, I'm wondering if they're beholden to advance Internet Sales Tax as UPS has operations in the states where IST is a "thing

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The UPS collects duty on behalf of the federal government just like any customs broker does.  They do not collect state tax, they are not a marketplace facilitator. Some retailers and marketplaces are the ones responsible for collecting the state tax, it is not done by any customs broker or customs agent.

[marnotom!]

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@pjcdn2005 wrote:

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The UPS collects duty on behalf of the federal government just like any customs broker does.  They do not collect state tax, they are not a marketplace facilitator. Some retailers and marketplaces are the ones responsible for collecting the state tax, it is not done by any customs broker or customs agent.

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UPS doesn't collect duty on a standard shipment, either, unless the importer somehow manages to prepay it.  It has to post a bond to customs if the customer hasn't done that.  It's pretty much like how the Global Shipping Program handles the issue of duty and taxes owing.

This is from the UPS Canada site, but I would imagine in-transit bonds work pretty much the same in the US:

https://www.ups.com/ca/en/shipping/zones-and-rates/customs-clearance.page

Seeing as customs brokers in Canada would calculate provincial sales tax owing on an item as well as federal tax, I'm not clear on what mechanisms would or could prevent an American customs broker from calculating state sales taxes or use taxes owing on a casual import where there's no evidence that they've been paid by the importer.

[pjcdn2005]

lol you are like a dog with a bone.  If you are going to insist on your 'theory' then please show something in writing that actually applies to the US.  If they actually charge it it should be easy for you to find info showing that.  It's more difficult though to find evidence that something doesn't happen.  For example, if they don't collect state tax they are unlikely to say so.  The UPS page that I looked at only mentions the $800 minimus, nothing about taxes.

There is no evidence on any package sent through mail to the US  that the state tax has been paid  as it is not collected at that point  by US customs so I really don't understand what makes you think that UPS would need that info or collect it. 

btw... That  link you provided about UPS collecting Canadian duty and taxes does not mention provincial tax..just 'tax'.   Considering that the GSP appears to collects gst and hst but does not collect separate provincial tax, I suspect that is the same for any customs officer or broker in Canada.  

[arhirii2007]

Why do you care if the buyer pays tax/duty? As long as delivery is confirmed you are golden.

[marnotom!]

I guess you haven't been on the receiving end of a UPS Standard shipment from the United States.  You're paying much more than mere taxes and duty if the item is brokered through them.

[marnotom!]

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@pjcdn2005 wrote:

lol you are like a dog with a bone.  If you are going to insist on your 'theory' then please show something in writing that actually applies to the US.  If they actually charge it it should be easy for you to find info showing that.  It's more difficult though to find evidence that something doesn't happen.  For example, if they don't collect state tax they are unlikely to say so.  The UPS page that I looked at only mentions the $800 minimus, nothing about taxes.

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😂I guess I'm just a nerd who loves thought experiments and knowing how things work.  Of course the UPS page would say nothing about the $800 de minimis applying to taxes.  That's because it doesn't.  If it did, there would likely be some sort of break for our US buyers purchasing items from us.

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@pjcdn2005 wrote:

There is no evidence on any package sent through mail to the US  that the state tax has been paid  as it is not collected at that point  by US customs so I really don't understand what makes you think that UPS would need that info or collect it. 

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Internet sales taxes cover online sales.  This is an online sale.

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@pjcdn2005 wrote:

btw... That  link you provided about UPS collecting Canadian duty and taxes does not mention provincial tax..just 'tax'.   Considering that the GSP appears to collects gst and hst but does not collect separate provincial tax, I suspect that is the same for any customs officer or broker in Canada.  

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I'm pretty certain that items my wife or I have received by courier where taxes are due had calculations for BC PST as well as GST on the invoice, but I only have a dim memory of that to go by.

Anyway, point taken that all this is obscuring the main bit of advice for the OP (who's likely headed for the hills by now) which is that they shouldn't even be contemplating using UPS Standard without the approval of the buyer as the buyer didn't see it as a shipping method in the listing.  The shipping method may have been an important factor in the buyer's decision to purchase from the OP.

[marnotom!]

Update: Just remembered that there’s that thing about “nexuses” as well, so I suppose a UPS Standard package to the US from Canada would be assumed by the broker to have had that issue dealt with in the sale. I’ll shut up now. 😂 Thanks for your patience, PJ! 👍