Alberta Sales Tax?

[zork88]

Why was I just charged 13% sales tax in Alberta, when we have no provincial sales tax? Only the national GST, which is 5%. The invoice stated specifically “13% AB Sales tax”, this needs to be corrected.

[marnotom!]

As far as I know, eBay hasn't started automatically adding sales tax charges to purchases yet, so this is likely something the seller did.  You'd have to get in touch with the seller to find out why this happened.

Sounds like the seller might be based out of Ontario if you were charged 13%, am I right about that?

[cumos55]

 The seller may be charging a tax based on where he lives....  Ontario with HST = 13 %.... rather than where the buyer lives... Alberta with GST = 5 %.

[ypdc_dennis]

Who charged you the 13% sales tax?

Most likely it was an Ontario Seller with an improperly set up tax table.

Contact the Seller and ask for a refund of the improperly charged sales tax.

This type of problem will disappear July 1, when ebay takes over the handling of sales tax for all Canadian ebay sales. Currently, any sales tax is added based on the tax table that the Seller has set up, and the tax amount is given to the Seller (who is supposed to deal with the government).  eBay does not check to see if Sellers have the tax table set up correctly.

-;-

[marnotom!]

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@ypdc_dennis wrote:

This type of problem will disappear July 1, when ebay takes over the handling of sales tax for all Canadian ebay sales.

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We hope.  We're talking about the same eBay, right?  😂

[reallynicestamps]

Have you contacted the seller to ask why he is charging you sales taxes at all?

Only sellers who are registered should be collecting tax, since only they can remit tax.

Collecting tax without sending it to the proper government makes the tax man very annoyed.

[sparx_63]

Actually..

All vendors in Canada are required to collect sales tax and report it on income tax.  If the business does over 30K a year in sales, the tax has to be remitted and then the vendor is assigned a tax number. Once number is assigned, tax must always be remitted.  If a vendor is unsure they will make over 30K, they should still collect the tax..because if they go over 30K they will be on the hook for it whether or not they collected it.  BTW this 30K is total business sales, does not matter where the item is sold to.

[martiqefinds]

A 13% sales tax for Ontario makes that shop a bit less attractive than a shop from a province that has a 5% tax rate. That is 8% more for the client to pay. Can't be helped but makes the competition a bit steeper. 

[marnotom!]

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@martiqefinds wrote:

A 13% sales tax for Ontario makes that shop a bit less attractive than a shop from a province that has a 5% tax rate. That is 8% more for the client to pay. Can't be helped but makes the competition a bit steeper. 

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Generally speaking, a buyer located in Alberta making an online purchase from a seller in Ontario should be charged 5% GST.

[marnotom!]

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@sparx_63 wrote:

Actually..

All vendors in Canada are required to collect sales tax and report it on income tax.  If the business does over 30K a year in sales, the tax has to be remitted and then the vendor is assigned a tax number. Once number is assigned, tax must always be remitted.  If a vendor is unsure they will make over 30K, they should still collect the tax..because if they go over 30K they will be on the hook for it whether or not they collected it.  BTW this 30K is total business sales, does not matter where the item is sold to.

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Your post suggests that sellers with less than $30K in sales get to keep the tax they collect and as that's not the case, I'm going to conclude you made a typo.  Sellers with less than $30K in annual sales are not required to register for the collection of GST/HST nor are they required to collect it.

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

[lotzofuniquegoodies]

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@marnotom! wrote:

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@martiqefinds wrote:

A 13% sales tax for Ontario makes that shop a bit less attractive than a shop from a province that has a 5% tax rate. That is 8% more for the client to pay. Can't be helped but makes the competition a bit steeper. 

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Generally speaking, a buyer located in Alberta making an online purchase from a seller in Ontario should be charged 5% GST.

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As I understand things that is what should be happening. From my experience with online purchases. on many occasions I have been charged as if I was a resident to that province (dual taxes vs just GST-AB). Consistency/correctness mainly depends on if the seller knows or doesn't know what they are doing and applying taxes correctly.

-Lotz

[reallynicestamps]

@martiqefinds 

The Standard Practice is that the BUYER pays the tax for the BUYER's province.

We ran into this with our Ottawa shop, on the border of ON and QC.

Our QC customers sometimes wanted to be billed with QC addresses, even when picking up in-store with items ordered by "mail" (internet/ phone/ auctions held in ON with non-Ontario participants).

This is also how the Internet (state) Sales Tax is handled by US venues like eBay, Amazon, etsy, etc.

The problem being solved by the Internet Sales Tax was that states were losing revenue to untaxed online venues.

And businesses that had outlets in multiple states had to charge sales taxes on internet sales in those states where they had a physical presence.

@lotzofuniquegoodies 

I agree.

The seller may just be ignorant.

We see many new sellers trying to collect sales taxes (or asking how to collect sales taxes) without understanding this.

Which could lead to trouble.

[pjcdn2005]

Actually, collecting tax when you are not registered to do so is illegal.   The money 

is collected on behalf of the government, you don't collect it just in case you might need to submit it.  You collect when you are registered and required to submit it.

Do you have a gst/business number?