why is PST not charged?

[nfuz]

So if I'm in Ontario and I buy something from a company that doesn't have stores in Ontario over the net, I don't get charged PST (ie: www.ncix.com)

But how come http://www.newegg.ca charges PST? Shouldn't they also only be charging GST? Or shouldn't NCIX be charging both?

What am I missing? Same situation, two different charges...

[Hairball]

Perhaps they're a registered business (or have PST registration) in all 10 provinces.

[canehdianman]

Is newegg's canadian office in Ontario? If so, then that is why. When both the company and the customer are located in the same (PST-charging) region, then PST is charged.

NCIX is located in B.C. so no PST is charged (neither BC's nor ON's)

[nfuz]

Is newegg's canadian office in Ontario? If so, then that is why. When both the company and the customer are located in the same (PST-charging) region, then PST is charged.

NCIX is located in B.C. so no PST is charged (neither BC's nor ON's)

I dont know, is it?

I thought newegg was 100% american based with nothing in Canada...

[angel_wing0]

i would ask them if i were you. The only reasons why they would charge PST is (1) they have offices in ontario or (2) they have huge presence (aka sales) in ontario which i doubt.

They have cheap prices, but their shipping is just too crazy for me to buy anything there.

[AllWheelDrift]

PST is also charged when importing something from the US.

[Noobzilla]

Canadian customs charges GST + PST on taxable imports, which either the sender or the receiver has to pay.

Newegg.ca is US based; they bill the customs charges to their shipping account, and pass over the charge to you during checkout.

You don't pay PST importing from another province because we don't have provincial border guards to enforce it, but you're still technically required to remit the PST you should have paid.

[brunes]

Its because you are supposed to pay PST on things you buy from NCIX - you are supposed to remit it yourself.

They have cheap prices, but their shipping is just too crazy for me to buy anything there.

If you filter by Free Shipping (there is a big link right on the home page) you will find many items that are very good deals.

Frankly I am glad Newegg is giving NCIX some competition; Newegg.com's customer service is head and shoulders above NCIX / Direct Canada / etc.

[nfuz]

Canadian customs charges GST + PST on taxable imports, which either the sender or the receiver has to pay.

Newegg.ca is US based; they bill the customs charges to their shipping account, and pass over the charge to you during checkout.

You don't pay PST importing from another province because we don't have provincial border guards to enforce it, but you're still technically required to remit the PST you should have paid.

But aren't computer peripherals duty free with the NAFTA agreement? I'm not too familiar with that though...

[nfuz]

i would ask them if i were you.


Oh I called them up, spoke to a very nice girl, we talked about 30min, on hold on and off as she spoke to the supervisor. She said she's worked for newegg's CS for the last 3 years but this is the first time anyone has called and inquired about it.

In the end, her and the supervisor were perplexed by my directcanada/ncix examples, and said would forward my question to their corporate accounting department, and I'd hear from them.

[nfuz]

Frankly I am glad Newegg is giving NCIX some competition; Newegg.com's customer service is head and shoulders above NCIX / Direct Canada / etc.

Newegg's customer service is stellar :)
You can actually give em a call and get a HUMAN on the phone within 5-10min (usually 1min)...

During my fiasco with ncix... spent about 4 hours redialing as their darned system would auto dump me to voicemail after 3min on hold!!

[Hairball]

But aren't computer peripherals duty free with the NAFTA agreement? I'm not too familiar with that though...

Computer parts and electronics generally have no duties.

However, sales tax are not duties, which is why they are charged.

[AllWheelDrift]

But aren't computer peripherals duty free with the NAFTA agreement? I'm not too familiar with that though...
duty free != tax free

[Lyrrad0]

If NewEgg is shipping from the States, then if they don't charge PST, then customs is likely to be charged and it'll cost you more.

If NewEgg is shipping from Canada, then they are likely charging PST because they have an office or warehouse in Ontario.

From a quick look at their website, they're probably shipping from the US and need to charge PST to avoid you getting hit with extra taxes. (UPS charges atrocious duty/customs fees)

[nfuz]

So basically... every single RFDer thats recommending NCIX over NewEgg because "You save on PST", is essentially defrauding the government, because even though NCIX isn't charging you, you are supposed to remit?

[nfuz]

From a quick look at their website, they're probably shipping from the US and need to charge PST to avoid you getting hit with extra taxes. (UPS charges atrocious duty/customs fees)

But I thought thats why newegg charges the extra $1... to avoid those fees?

[nfuz]

Computer parts and electronics generally have no duties.

However, sales tax are not duties, which is why they are charged.

Ok that makes sense, but that doesn't answer the question.

Why is a PROVINCIAL sales tax being charged by an INTERNATIONAL (newegg) company, and not by a CANADIAN (ncix) company located in another province

Makes no sense that 1 would do it, and 1 wouldn't?

Unless ncix leaves it up to you to remit, but... that's not stated anywhere at all?

[Hairball]

In theory you are supposed to pay your own PST for private purchases from outside of Ontario, but in reality no one does. So if you buy from NCIX, which does not charge PST to Ontario customers, you have to pay PST to the Ontario government.

As for newegg.ca, I am not sure if this is correct, but if the operation is only in the US and ship from the US, maybe they're using a customs broker, which would handle all the taxation for them.

[nfuz]

In theory you are supposed to pay your own PST for private purchases from outside of Ontario, but in reality no one does. So if you buy from NCIX, which does not charge PST to Ontario customers, you have to pay PST to the Ontario government.

As for newegg.ca, I am not sure if this is correct, but if the operation is only in the US and ship from the US, maybe they're using a customs broker, which would handle all the taxation for them.

newegg.ca uses UPS as the shipper...

Ive never heard about remitting to the ont government or anything though...

Why isn't there a little note on ncix's site that says customers outside of BC must remit to their respective governments or something, this is the first time im hearing of this....

And if this is actually the case, shouldn't this forum discourage people from using the 'OMG NO PST' as a reason to be using ncix, essentially promoting fraud?

I mean the forum has policies on no warez (piracy) related discussion/help/sources etc... isn't promoting to not pay a tax also just as bad?

[Hairball]

It's kind of a well known loophole, and this is pretty much enforceable unless we start setting up provincial customs to charge these taxes on our internal trade, which would be ridiculous.

However one exception would be cars, you have to pay PST when you register a used car. Heck, even if it was previously sold in Ontario and PST was paid on it.

[Kasakato]

Basic tax and import law FTW, Im sure Google can help you understand international shipping.

[Noobzilla]

Ok that makes sense, but that doesn't answer the question.

Why is a PROVINCIAL sales tax being charged by an INTERNATIONAL (newegg) company, and not by a CANADIAN (ncix) company located in another province

Makes no sense that 1 would do it, and 1 wouldn't?

Unless ncix leaves it up to you to remit, but... that's not stated anywhere at all?

Ncix doesn't have to charge PST for out of province.
Newegg doesn't have to charge GST or PST. Companies can volunteer to collect these taxes if they want.

In this case, newegg elects to do so; you pay the sales tax when you checkout. Otherwise you would have to pay the tax to the delivery guy when it arrives, along with a higher customs processing fee. You would then discuss your purchase on RFD. You would say "OMG I had to pay an extra $xxx when I received my newegg order, I'm never shopping there again," thereby deterring other potential customers and damaging newegg's reputation.

They anticipate this, hence making you pay the tax in advance, with no surprises.

Ncix elects not to charge PST, since the package won't pass through customs, and the customer won't be in for any surprises. If you don't pay PST, it's implied that you are familiar with tax law of your own province, and remit the amount accordingly.

[nfuz]

Ncix doesn't have to charge PST for out of province.
Newegg doesn't have to charge GST or PST. Companies can volunteer to collect these taxes if they want.

In this case, newegg elects to do so; you pay the sales tax when you checkout. Otherwise you would have to pay the tax to the delivery guy when it arrives, along with a higher customs processing fee. You would then discuss your purchase on RFD. You would say "OMG I had to pay an extra $xxx when I received my newegg order, I'm never shopping there again," thereby deterring other potential customers and damaging newegg's reputation.

They anticipate this, hence making you pay the tax in advance, with no surprises.

Ncix elects not to charge PST, since the package won't pass through customs, and the customer won't be in for any surprises. If you don't pay PST, it's implied that you are familiar with tax law of your own province, and remit the amount accordingly.

Assuming all that is accurate, then that opens up a brand new can of worms... promoting tax fraud when people routinely say "just pricematch at ncix, no pst"

That's rather smart yet shady of ncix to elect not to do that, so their prices in the end are cheaper as far as the masses are concerned, and end up taking sales from other companies that actually are collecting the proper taxes!

What what category that discussion would belong in........... hmm

Thanks for the info!

[Noobzilla]

Assuming all that is accurate, then that opens up a brand new can of worms... promoting tax fraud when people routinely say "just pricematch at ncix, no pst"

That's rather smart yet shady of ncix to elect not to do that, so their prices in the end are cheaper as far as the masses are concerned, and end up taking sales from other companies that actually are collecting the proper taxes!

What what category that discussion would belong in........... hmm

Thanks for the info!

Yes, it is unfair to local retailers who are charging PST, and the CRA can go after you if you don't pay PST on your imports. It's just not high on their list of priorities.

[Hairball]

Yes, it is unfair to local retailers who are charging PST, and the CRA can go after you if you don't pay PST on your imports. It's just not high on their list of priorities.

Just to clarify, the Canada Border Services Agency (CBSA) DOES charge PST when you import stuff into Canada from abroad. However I don't think neither the CBSA nor CRA are responsible for enforcing the PST on inter-provincial imports. There should be a provincial agency for that.

Heck, even if one was to voluntarily pay the PST, how are you supposed do it anyway?

[billiam]

There are a lot of factors that go into determining who pays and collects sales/consumption taxes. For Ontario refer to this link:

http://www.rev.gov.on.ca/english/guides/rst/202.html

It's possible that the seller of these goods has a "presence" in Ontario as indicated in the link above and was required to charge the tax. Did they quote their ORST number on the invoice by chance?

Also goods that are duty free still attract sales/consumption taxes on import unless specifically exempted from tax just to clarify.

[ShopperfiendTO]

Heck, even if one was to voluntarily pay the PST, how are you supposed do it anyway?

For Ontario purchasers:

Taxable Goods
General
RST applies to the total fair value of taxable goods and services brought into Ontario for own use. The total fair value includes:

- the purchase price (in Canadian funds) of goods bought outside Canada
- delivery, shipping, or mailing charges billed by the vendor (in Canadian funds)
- customs duties and federal excise taxes paid to bring goods into Canada (brokerage charges and federal Goods and Services Tax (GST) are not part of the total fair value)
- any applicable tax for fuel conservation.

Payment of Tax
A cheque or money order to pay the RST on goods imported from within Canada should be made payable to the Minister of Finance and delivered to any Ontario Ministry of Revenue Tax Office, or mailed to the Ministry of Revenue, 33 King Street West, PO Box 623, Oshawa ON L1H 8H5. RST on non-commercial goods coming from outside Canada will normally be collected at border crossings by CBSA at the time of importation.

http://www.rev.gov.on.ca/english/guides/rst/202.html

[1226]

So basically... every single RFDer thats recommending NCIX over NewEgg because "You save on PST", is essentially defrauding the government, because even though NCIX isn't charging you, you are supposed to remit?

yes

[AllWheelDrift]

So basically... every single RFDer thats recommending NCIX over NewEgg because "You save on PST", is essentially defrauding the government, because even though NCIX isn't charging you, you are supposed to remit?
I always pay PST when I buy from NICX...

But I live in BC. The flip side is I don't pay shipping because I do in store pickup.

[nfuz]

Thanks for the info,

I have created a thread in the "suggestions" forums, to get the mods/admins POV on this quite interesting topic!

For those who are intersted: http://www.redflagdeals.com/forums/showthread.php?t=700499

[Lulz]

So basically... every single RFDer thats recommending NCIX over NewEgg because "You save on PST", is essentially defrauding the government, because even though NCIX isn't charging you, you are supposed to remit?

Awesome question, would like to know answer as well.

[gman]

Awesome question, would like to know answer as well.

Was it answered already?

[Stinger]

That's rather smart yet shady of ncix to elect not to do that, so their prices in the end are cheaper as far as the masses are concerned, and end up taking sales from other companies that actually are collecting the proper taxes!


Thanks for the info!


No - Its not shady or fraudulent at all.
There is a LOT of misinformation flying around here, and a lot of bullocks accusations regarding tax fraud

Take a look here for a quick run down:
http://sbinfocanada.about.com/od/pst/a/PSTecommerce_2.htm


At the very end is a nice little summary regarding what provinces require what taxes to be collected. All provinces that collect PST, except BC and Manitoba are "voluntary" unless that is the home province or they maintain a business presence- which requires them to basically setup shop and advertise.

As BC is NCIX's home province - they collect PST, for MB the law looks like this:

Out-of-province businesses that sell/lease taxable goods to Manitoba purchasers are required to be registered as a vendor under the Act and to collect the RST if all of the following circumstances exist:
1) The seller solicits the order for the sale in Manitoba, directly or through an agent, by advertising or any other means, e.g. in person, by telephone, mail, e-mail, fax, posters, television or newspaper advertisement targeted towards Manitoba customers,
2) The seller accepts orders originating in Manitoba to purchase tangible personal property. The order can be originated by telephone, Internet, e-mail, fax, letter or any other means from a location in Manitoba to the seller or agent located in or out of Manitoba,
3) The goods are acquired for consumption or use in Manitoba, i.e. not for resale, and
4) The seller causes the goods to be delivered in Manitoba, i.e., delivered by the seller, or shipped by the seller by common carrier, whether

Technically - #1 is not met. There is NO direct solicitation of orders for Manitoba customers. NCIX ads, commercials and such are ONLY directed to BC customers, there are no ads outside of the province - their internet ads do not specifically target Manitobians (maybe thats not the right word). Maybe considered a loophole, but in a sense they could be seen as shooting themselves in the foot.

The other provinces maintain a very similiar list of rules, most of which are even more lenient or have loose "loopholes"
Also NCIX is most likely only a registered business in BC - so there is no established business presence elsewhere - though this may leave their business open to be potentially copycatted in another province

Companies like TD charge PST to BC customers, even though they are based out of Ontario because they could potentially be registered in other provinces as a business as well. Also they are able to advertise in other provinces.

There are numerous small business that do not charge PST except in their home province - it is a very common thing

It may seem unfair, but obviously NCIX is not at the capacity where it would be required to expand into provinces outside of BC, whereas other etailers are.


The reason newegg charges GST and PST is as others have mentioned, they do it on your behalf. Obviously they maintain a business presence in other provinces, or they intend to in the future and want to safeguard. Also, if they didn't charge it to you - MOST likely you would be billed when the package arrived as required by law for imports.... tacking onto the "clearing fees" by UPS....

[belowzeros]

No - Its not shady or fraudulent at all.
There is a LOT of misinformation flying around here, and a lot of bullocks accusations


so true...you guys just pulling stuff out your butt need to not click "submit reply", you do more damage than good


Regarding the PST mystery consider a "canadian corporation" versus provincial or even small business. also google is your friend, this information isn't that hard to find from official sources.

[DLFB]

There is a LOT of misinformation flying around here, and a lot of bullocks accusations
lol so true.

You can be a REGISTERED BUSINESS in Canada even if you aren't a resident. You can do that by registering with CRA. Many business do this so they can claim ITC with CBSA.

[tlamm]

My wife is an auditor for PST in Ontario.

If a business has a presence (ie office) in Ontario they have to collect and report the PST.

If they do not have a presence, they do not have to collect it.

For what its worth, I order tons of stuff from BC PST free.

[sdzbwxp]

PST is due any time you make a purchase for use in the province, unless there is an exemption for the item. In case you are buying from out of province vendors, you should self-assess tax and remit to the provincial government.

If you make sales to other province, you may be asked to register and collect tax for the province even if you do not have a store or location in the province. An example is tigerdirect who do not have any BC location, but registered with BC. Even some US companies are registered to collect tax for canadian provinces. So, In NCIX's case, they may get a phone call from Ontario any time.

Conclusion: if you purchased online from other province, and did not get charged PST, consider yourself lucky. It is not legal and you do owe tax to the province. Though, the chance that an individual gets audited is slim. If you are running a business, and have out of province purchases without PST paid, you will be liable for all tax owing plus interest and penalty if gets audited.

[thrifty1]

So basically... every single RFDer thats recommending NCIX over NewEgg because "You save on PST", is essentially defrauding the government, because even though NCIX isn't charging you, you are supposed to remit?

What is the purpose of your post sir ? to make us feel bad ?

Perhaps we should all just flag our purchases under Liberia as is the case of CSL... or is that just for former finance ministers ?? or prime ministers ???

[balance]

guys there is no way not paying NCIX PST is fraud if that was the case CRA would of when after them long time ago and not have us here sitting on our desk typing about fraud.

what newegg does surprises me and discourages me to by from them unless its really good deal.

NCIX ftw

[1226]

guys there is no way not paying NCIX PST is fraud if that was the case CRA would of when after them long time ago and not have us here sitting on our desk typing about fraud.

what newegg does surprises me and discourages me to by from them unless its really good deal.

NCIX ftw

a) PST is collected by the provinces, not CRA.
b) It is tax fraud. On a tiny, tiny scale. Not self-assessing a few bucks on a hard drive purchase is the jaywalking of tax fraud. Yes it's illegal, but it would cost more to collect than the amount they collect so nobody cares.

[sdzbwxp]

1226 was correct.
provincial governments collects PST, NOT CRA.

There are businesses that do not charge PST where they should. Then years later, they get audited and assessed for taxes they didn't collect plus interest and penalty. Obviously, most business won't be able to go back to their customers and ask for the tax, they bite the bullet. In NCIX's case, they won't get assessed by ON if they are not registered yet, but they can expect a call from ON government asking them to register at any time.

In fact, many provinces have audit office in other provinces focusing on inter-provincial sales.

Not self-assessing tax on small purchases is not big fraud, but it is certainly not legal. I guess the point of the thread was to find out the principle.

I bet provincial governments would love to be able to track and recover all those taxes on individual level, but they haven't figured out how. PST on Inter-provincial car sales are captured through insurance though.

[kleptodathief]

newegg 'free shipping' is just a BS farce! they charge u 'handling fees'/extra fees and it turns out to b more then the product itself!

so ur 10$ item bcomes 30bux shipped final price :mad: