# Duty on online purchases from US



## zigzagry (Apr 12, 2003)

Hi,
I just made my first purchase from the US on Ebay and am wondering how much I can expect to pay for Duty. Also, how do I make the payment? Will the product be held until I make the payment? Will the delivery go straight to a holding center?

Any input would help.

The product is a pair of Carbon Fibre Altezza tail lights for my Cherokee and the Cost is just under $100 Canadian.

Thanks


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## MacDoc (Nov 3, 2001)

No duty but depending on shipping method 15% tax plus a brokerage fee up to $65


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## JPL (Jan 21, 2005)

When I purchase through ebay I always contact the seller and ask if he will ship via USPS, no brogerage fees and sometimes no GST or PST. Sellers that use UPS only I avoid like the plague.

Most sellers on ebay use PayPal, some prefer credit cards but for protection for both parties PayPal works best IMHO


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## zigzagry (Apr 12, 2003)

So does that mean that I have already paid this?
Included in my payment was $35 for shipping.
Will I have to make another payment once the item crosses the boarder?


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## moonsocket (Apr 1, 2002)

zigzagry said:


> So does that mean that I have already paid this?
> Included in my payment was $35 for shipping.
> Will I have to make another payment once the item crosses the boarder?


It depends on how it was shipped. If it was UPS expect to pay the Canadian taxes and a brokerage fee on top of that. If USPS you may get away with paying nothing.


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## zigzagry (Apr 12, 2003)

Ok cool. I sent an email to the seller because it does say that they use UPS or USPS. So I just requested that they send it via USPS instead of UPS. Hope they get the message.


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## CanadaRAM (Jul 24, 2005)

Rule of thumb is that brokerage fees, duties and taxes are NEVER included in the shipping cost on an over border sale. If you use FedEx Air (for $60 and up) then they throw in the brokerage for free. UPS charges like bandits for brokerage. Avoid at all costs. US Postal Service (I find that too many US sellers hear USPS and write down UPS  ) is the best way if time is not critical. Expect to pay GST, PST and an $8 fee to the postal carrier, cash.


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## fellfromtree (May 18, 2005)

Many US sellers are not even aware of brokerage fees. If you look at the UPS websites (both CDN and US), it is very difficult to find the charts for brokerage fees.

US sellers who use UPS often prefer that service bacause they get free pick-up of items etc, so even if you request USPS, they may not be willing to alter their shipping standards. The rule of thumb is ALWAYS know the shipping fee/service before you bid.

USPS/Canpost has a flat fee of $5CAD brokerage, plus pst/gst. This applies to items valued +$20CAD. Depending on the product, there may or may not be other taxes (example an excise tax on precious stones/metals/jewelry).

Also, duty is calculated on the value claimed on customs forms- so if your seller claims it is worth $200, you will be assessed on that value. US sellers not familiar with shipping outside country might claim inflated values, or insurance value, or they include the shipping fee in the value- they should only claim the actual paid value.

What you pay the seller for 'shipping' is irrelevant. There may be little to no relationship between a sellers 'shipping fee' and the actual postage cost. There could be 'handling' fees and other imaginary fees. Shipping fees are not postage fees.


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## MissGulch (Jul 20, 2005)

I am in the U.S., and have bought and sold on eBay to and from Canada for years. As a seller I fill out a green U.S. customs form, list the item's approximate value and I check off "gift." After doing this nobody in Canada has been asked to pay customs fees. I have sent dozens of items to Candada this way.

As a buyer I received many packages from Canada and have never been asked to pay any duty fees. 

What have I been doing right? I'm not sure, but I have never paid any customs.


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## fellfromtree (May 18, 2005)

Mioss Gulch- marking 'gift' on the customs form is pretty standard method, but it can in fact backfire. Customs can open and assess, or re-assess, any package for value. They will then calculate duty/taxes based on that amount. It is in fact the importer (the buyer) who is ultimately responsible for what is on that customs form. The buyer is an importer. whether by chance or design, and they are responsible for whatthey are inporting.

If someone is receiving packages on a regular basis, and their packages are inspected, they are logged by customs. If they are continually receiving 'gifts', they will be flagged. I just read a thread by someone who had to go to a customs hearing to explain why their 'gift' had a receipt for payment in it.

Many buyers ask sellers to mark 'gift', but it is the responsibility of the buyer to know and pay the applicable taxes/duty. No seller should have to fudge cutoms forms. Claiming the actual paid value is the best solution. 

US residents can import up to $200USD duty free. The Canadian import limit is $20CAD (about $18US).


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## iPetie (Nov 25, 2003)

People seem to always confuse "Duty" with "Tax". Duty is a tax over and above sales tax. In fact, if memory serves me correctly sales tax is charged on a product after duty is calculated.

Duty is a tax value assigned to various different products and in the past were designed to protect specific industries. They are a protectionist tax. With free trade, very few items (if any) are charged duty between Canada and the US. 

Sales tax is just that, sales tax. Unfair, from the provincial perspective in my opinion because if I buy out of province I don't get tagged. If I buy from the US I get tagged.


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## MissGulch (Jul 20, 2005)

fellfromtree said:


> Mioss Gulch- marking 'gift' on the customs form is pretty standard method, but it can in fact backfire.


Maybe so, but I have shipped several items to a buddy in B.C., and he has sent things to me, and nobody ever bothered us over the packages. This has been going on for years, aside from the eBay customers. Jes sayin'.


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## krs (Mar 18, 2005)

MissGulch said:


> Maybe so, but I have shipped several items to a buddy in B.C., and he has sent things to me, and nobody ever bothered us over the packages. This has been going on for years, aside from the eBay customers. Jes sayin'.


If it's a 'buddy', by all means keep marking 'gift' since that is in fact what it is. Gifts are free up to $60.-, that $60.- Canadian!, after that sales tax should get applied, but the Customs people are not too stringend about this when it comes to gifts.


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## CanadaRAM (Jul 24, 2005)

iPetie said:


> People seem to always confuse "Duty" with "Tax". Duty is a tax over and above sales tax. In fact, if memory serves me correctly sales tax is charged on a product after duty is calculated.
> 
> Duty is a tax value assigned to various different products and in the past were designed to protect specific industries. They are a protectionist tax. With free trade, very few items (if any) are charged duty between Canada and the US.
> 
> Sales tax is just that, sales tax. Unfair, from the provincial perspective in my opinion because if I buy out of province I don't get tagged. If I buy from the US I get tagged.


Ahh.. but duty is assessed based on the country of manufacture, not where the shipment comes from -- so that nice Dell USA monitor shipped from Texas that says "Made in China" on the box is not covered by NAFTA and will be assessed 6.9% duty.

Proovincial tax: It is your obligation as a resident of Province X to voluntarily declare all purchases made in other provinces and remit your province's tax. The fact that nobody ever does doesn't change the law... ref. B.C.'s aborted attempt to get Costco in Alberta to turn over the purchase records of BC residents who are purchasing 'across the line'.

"Gift" is risky. Putting nothing in the Value for Duty box is even worse, because then Customs gets to make up their own prices. So that $25 piece of software could be taxed at $300.


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## krs (Mar 18, 2005)

CanadaRAM said:


> Proovincial tax: It is your obligation as a resident of Province X to voluntarily declare all purchases made in other provinces and remit your province's tax. The fact that nobody ever does doesn't change the law... ref. B.C.'s aborted attempt to get Costco in Alberta to turn over the purchase records of BC residents who are purchasing 'across the line'.


I thought I read somewhere that BC and Ontario struck a deal to collect each others sales tax - ie, if I as a resident of Ontario buy an item in BC, I get charged the Ontario sales tax by the BC seller and vice versa.

And declaring an item as a "gift" is only risky if it is not a gift.


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## ErnstNL (Apr 12, 2003)

KRS said:

_I thought I read somewhere that BC and Ontario struck a deal to collect each others sales tax - ie, if I as a resident of Ontario buy an item in BC, I get charged the Ontario sales tax by the BC seller and vice versa._

I buy lots of items from outside Newfoundland and Labrador. Rarely is the HST NOT applied.
If I buy an item from Dell I get charged 15% HST. If I buy something from NCIX in BC, I am charged 15% HST. 
The stores are online, so the Feds know that they must charge the appropriate taxes. The businesses are diligent in their collection or their online sales will be curtailed.


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## krs (Mar 18, 2005)

ErnstNL said:


> KRS said:
> 
> _I thought I read somewhere that BC and Ontario struck a deal to collect each others sales tax - ie, if I as a resident of Ontario buy an item in BC, I get charged the Ontario sales tax by the BC seller and vice versa._
> 
> ...


Are you sure that money doesn't go into their own pockets, at least the non-GST portion of it?
To collect provincial tax, the store has to have a PST number - I found when I ask them for it because they charge tax, they come up with excuses like it's confidential, or we'll have to refer you to our accounting department etc.
However, with HST it's probably different because it's a blended tax and one definitely has to pay the 7% GST 

- soon to be 6%.


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## jasonwood (Oct 19, 2003)

ErnstNL said:


> I buy lots of items from outside Newfoundland and Labrador. Rarely is the HST NOT applied.
> If I buy an item from Dell I get charged 15% HST. If I buy something from NCIX in BC, I am charged 15% HST.
> The stores are online, so the Feds know that they must charge the appropriate taxes. The businesses are diligent in their collection or their online sales will be curtailed.


Anyone who is registered for GST must collect 15% HST when shipping to the applicable provinces. What's really dumb is that when you remit GST/HST, you aren't asked how much of it is HST (or at least I'm not), so I doubt the provinces get their 8% on these out-of-province sales.


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## jasonwood (Oct 19, 2003)

krs said:


> I thought I read somewhere that BC and Ontario struck a deal to collect each others sales tax - ie, if I as a resident of Ontario buy an item in BC, I get charged the Ontario sales tax by the BC seller and vice versa.


That would surprise me a great deal.

As an Ontario-based seller, BC wants you to register for their provincial tax voluntarily (and vice-versa). They can't force you, because you're not under their jurisdiction. If you don't register voluntarily, your customers (who are under their jurisdiction) are responsible for paying the provincial tax directly to their government.

This, of course, doesn't happen much.


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## krs (Mar 18, 2005)

jasonwood said:


> That would surprise me a great deal.
> 
> As an Ontario-based seller, BC wants you to register for their provincial tax voluntarily (and vice-versa). They can't force you, because you're not under their jurisdiction. If you don't register voluntarily, your customers (who are under their jurisdiction) are responsible for paying the provincial tax directly to their government.
> 
> This, of course, doesn't happen much.


I wish I had kept the BC/Ontario article. Maybe it was just a proposal.
But since I never get anything from BC, I wasn't too interested.

On your second point - what would 'entice' an on-line reseller to register for PST in a province where he has no store or presence? Collecting taxes is just extra work for him and certainly doesn't make his customers happy.
Tiger Direct didn't used to charge Quebec sales tax, and then suddenly they started getting all the Quebec guys upset to the point where they won't order from TD any more. So the retailer looses and the Quebec government doesn't get their taxshare either. Sounds like a loose - loose unless you get every retailer in Canada on-board.


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