Yep I know I am. Ive on multiple times added items to the cart went to check out and saw 12% tax and hit the exit button.
Sales Tax - actual rules from CRA
- Thread starter Western Metal Inc
- Start date
Yep I know I am. Ive on multiple times added items to the cart went to check out and saw 12% tax and hit the exit button.
From personal experience any Gov. agency makes there own rules. What they tell you when you have a problem is or would be against the law if you were doing it but the rules don't seem to apply to them
- Location
- Richmond, BC
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- Location
- Richmond, BC
Lol, I changed my mind about posting because I think things are fine status quo, if WMI chooses to collect, so be it.
Ok folks. We really appreciate all the tax advice. Here is the long and the short of it. We have talked to a tax accountant - so if we went to another tax accountant and they encouraged us to go against the CRA where would that leave us when the CRA brings us before court? Let me tell you where I have seen this take other companies - the tax accountants bill is going to be approaching 6 figures - out of my pocket - to fight this in the courts. So "if" I win - I lose. Never mind the hours that it would require me to put the paperwork together to defend ourselves. And if I lose - well that will likely crush us. Not worth the risk at the end of the day. It's one thing for people to suggest fight fight fight - it is quite another risk when it is your house and family at stake. The government agency can literally ruin my whole day - lol.
What we have found is that sales from coast to coast are brisk - especially when we put on one of our sales. In most cases you are saving more than 8% on the sale - usually more like 20%. Always we are competitive especially considering the free freight option.
That said - this should be a level and fair trading field. We are always checking on the letter of the law and trying our best to not be the tax man. We have been told in no uncertain words that we are doing it the correct way. My advice to others in my position is to consider the consequences.
What we have found is that sales from coast to coast are brisk - especially when we put on one of our sales. In most cases you are saving more than 8% on the sale - usually more like 20%. Always we are competitive especially considering the free freight option.
That said - this should be a level and fair trading field. We are always checking on the letter of the law and trying our best to not be the tax man. We have been told in no uncertain words that we are doing it the correct way. My advice to others in my position is to consider the consequences.
The fact that you're still talking about the CRA shows me you either didn't consult with a tax accountant, or you didn't consult with a qualified one.
This is a provincial BC PST issue. It has nothing to do with the CRA. BC is not a participating province under the Excise Tax Act (neither is Alberta) and therefore the CRA isn't involved.
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FYI...the registration (and collection requirements) have already been posted...but here they are straight from the BC PST legislation
http://www.bclaws.ca/civix/document/LOC/complete/statreg/-- P --/Provincial Sales Tax Act [SBC%202012]%20c.%2035/00_Act/12035_08.xml#section168
172 (1) Subject to subsection (2), a person must be registered under section 168 at the time the person causes tangible personal property to be delivered in British Columbia if the person is located in Canada but outside British Columbia and, in the ordinary course of business, does all of the following:
(a) solicits persons in British Columbia for orders to purchase tangible personal property, by advertising or any other means;
(b) accepts orders to purchase tangible personal property, if the orders to purchase originate from locations in British Columbia; [ie, sales agents in BC]
(c) sells or provides tangible personal property to a person in British Columbia for use or consumption
(i) by the person,
(ii) by a third person at the expense of the person to whom the property is sold or provided,
(iii) by a principal for whom the person acts as agent, or
(iv) by a third person at the expense of the principal for whom the person to whom the property is sold or provided acts as agent;
(d) causes the tangible personal property described in paragraph (c) to be delivered in British Columbia.
(2) Subsection (1) does not apply to a person if the person sells or provides only tangible personal property that is exempt from tax imposed under this Act.
Note that ALL the requirements must be met, and they must be met in the ordinary course of business. Advertising online is not soliciting offers in BC anymore than it is soliciting offers in Australia. By the way...even if you thought you were advertising in BC, unless the orders are actually procured in BC by agents in BC, you're not required to register.
Sales taxes, and income taxes in general, require some type of physical presence within the jurisdiction before taxes apply. Unless you have a physical presence in BC, you're ok.
By the way, if you've been collecting BC PST, there is no provision within the Act to remit this to the CRA. Tax collected by unregistered vendors MUST be remitted to the BC Minister of Finance. Are you even registered with BC to collect PST? Or have you been remitting it to the CRA this whole time?
http://www.bclaws.ca/civix/document/LOC/complete/statreg/-- P --/Provincial Sales Tax Act [SBC%202012]%20c.%2035/00_Act/12035_08.xml#section168
172 (1) Subject to subsection (2), a person must be registered under section 168 at the time the person causes tangible personal property to be delivered in British Columbia if the person is located in Canada but outside British Columbia and, in the ordinary course of business, does all of the following:
(a) solicits persons in British Columbia for orders to purchase tangible personal property, by advertising or any other means;
(b) accepts orders to purchase tangible personal property, if the orders to purchase originate from locations in British Columbia; [ie, sales agents in BC]
(c) sells or provides tangible personal property to a person in British Columbia for use or consumption
(i) by the person,
(ii) by a third person at the expense of the person to whom the property is sold or provided,
(iii) by a principal for whom the person acts as agent, or
(iv) by a third person at the expense of the principal for whom the person to whom the property is sold or provided acts as agent;
(d) causes the tangible personal property described in paragraph (c) to be delivered in British Columbia.
(2) Subsection (1) does not apply to a person if the person sells or provides only tangible personal property that is exempt from tax imposed under this Act.
Note that ALL the requirements must be met, and they must be met in the ordinary course of business. Advertising online is not soliciting offers in BC anymore than it is soliciting offers in Australia. By the way...even if you thought you were advertising in BC, unless the orders are actually procured in BC by agents in BC, you're not required to register.
Sales taxes, and income taxes in general, require some type of physical presence within the jurisdiction before taxes apply. Unless you have a physical presence in BC, you're ok.
By the way, if you've been collecting BC PST, there is no provision within the Act to remit this to the CRA. Tax collected by unregistered vendors MUST be remitted to the BC Minister of Finance. Are you even registered with BC to collect PST? Or have you been remitting it to the CRA this whole time?
The way we were tought about this is all depends on location of the company.
For Example, if the company is a box store and has a location in every province, and you order from Quebec and have it shipped to a Quebec adress but its being ordered and shipped from Alberta, You still have to pay all of the taxes, not just the 5%. BUT if your a business that is only located in one province. You only need to pay that province tax. But Hey.... What do I know. I live in alberta so I always only pay 5%.
So if people want to complain. Then move to the better province lol.
If after all the taxes its more expensive then to buy from somebody else. then buy from them instead. Always just buy from cheapest as long as you get the service and warranties to qualify
For Example, if the company is a box store and has a location in every province, and you order from Quebec and have it shipped to a Quebec adress but its being ordered and shipped from Alberta, You still have to pay all of the taxes, not just the 5%. BUT if your a business that is only located in one province. You only need to pay that province tax. But Hey.... What do I know. I live in alberta so I always only pay 5%.
So if people want to complain. Then move to the better province lol.
If after all the taxes its more expensive then to buy from somebody else. then buy from them instead. Always just buy from cheapest as long as you get the service and warranties to qualify
It is not simply paying the 7% PST but the whole HST fiasco that got lots of BC folks upset at the BC Lieberal. Only when they discover the scrap HST referendum may pass did they start promising rebates that wasn't previously feasible. PST/HST is a dirty word in BC.
Funny this topic has come up, I'm just doing my year end and see my invoice from WM only has a GST/HST number though I was certainly charged PST (BC).
Please provide your BC PST registration number for my records.
Many thanks,
MG
My 5 cents worth and a short, short story. I have a family member who is self employed (publish author, two books, working on third). He wrote off everything while sailing and writing about sailing to various destinations. CRA denied about 50K in deductions. Family member says, take me to court and so they do. On court date, TWO CRA lawyers with assistants show up. Family member show up and with no lawyer. CRA says their piece, family member talks to judge. Judge asking the occasional question to both sides from time to time but basically just sits and listens.
Nutshell, at the end of the day the judge tells the CRA lawyers to make a deal with this guy or he (the Judge) will make a ruling. The family member got all his deductions. Case closed. Sometimes it pays to call the governments bluff. YMMV
Nutshell, at the end of the day the judge tells the CRA lawyers to make a deal with this guy or he (the Judge) will make a ruling. The family member got all his deductions. Case closed. Sometimes it pays to call the governments bluff. YMMV
Nudge, nudge, wink, wink; gov't never loses cases, they bribe their way out after getting insider info.
What do you think the judge would say when the regular joe ask if the ruling is going against them so that they can take the plea bargaining.
What do you think the judge would say when the regular joe ask if the ruling is going against them so that they can take the plea bargaining.
When I ran a webstore a few years ago I was audited by the BC PST Minister of Finance Dept. They requested a certain timeframe and I supplied it to them.
I had many, many purchases from outside of BC (over 50%). I thought the audit was because of the reasons you're stating here but it was not related to that. They didn't care about the out of province sales.
Everything was on the up and up (good bookkeeper ;-) )
Stick to the letter of the law as written and you should be fine. Don't take the advice of a gov't employee unless it is in writing. Hell, don't even take my advice, maybe I was just lucky!
I had many, many purchases from outside of BC (over 50%). I thought the audit was because of the reasons you're stating here but it was not related to that. They didn't care about the out of province sales.
Everything was on the up and up (good bookkeeper ;-) )
Stick to the letter of the law as written and you should be fine. Don't take the advice of a gov't employee unless it is in writing. Hell, don't even take my advice, maybe I was just lucky!
I'm not sure what you are saying. The CRA wanted to deny close to 50 grand in deductions over several years after an audit. The Judge sided with family member that his deductions are legitimate. Had the Judge side with CRA, family member would owe back taxes to the tune of 50K.
