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Sales tax on stamps

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lithograving
Pillar Of The Community


Canada
3072 Posts

Posted 01/19/2011  11:10 pm  Show Profile Bookmark this topic Add lithograving to your friends list  Get a Link to this Message

I'm curious as to whether other countries have to pay sales tax
on stamps purchased at the post office as we do here in Canada.

Here in Ontario we have to pay the dreaded HST (Harmonized Sales Tax)
at 13%, of which 8% is Provincial and 5% is Federal.

But heh we do have free health care.

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BeeSee
Pillar Of The Community
Stamp Community SupporterSupporter!


Canada
4556 Posts

Posted 01/19/2011  11:31 pm  Show Profile Check BeeSee's eBay Listings Bookmark this reply Add BeeSee to your friends list  Get a Link to this Reply

It is a very odd situation here in BC. If you buy various definitive stamps, say the $10 whale, you are charged 12% HST, which makes the final cost $1.20. However, if you mail a registered letter overseas ($12.95) and pay at the counter and they apply a postal meter (which I just recently did), there is no tax at all. This only applies for mail overseas or to the U.S. Within Canada you have to pay the tax.

This means that if you buy your stamps earlier for stock, you pay tax on then. If you end up using them on overseas mail, it means you have then paid tax on the mail, despite not being reguired!



BeeSee in BC
"The Postmark is Mightier than the Stamp"
http://brcstamps.com ---- BNAPS, RPSC, APS
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lithograving
Pillar Of The Community


Canada
3072 Posts

Posted 01/19/2011  11:40 pm  Show Profile Bookmark this reply Add lithograving to your friends list  Get a Link to this Reply

That's odd Bee See.
Another thing I was wondering about was whether foreign
customers have to pay tax on purchases from the Philatelic Centre.



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XNBer
Valued Member


Canada
184 Posts

Posted 01/20/2011  01:55 am  Show Profile Bookmark this reply Add XNBer to your friends list  Get a Link to this Reply

It is hard to figure out how and why the tax system works; but, we can be sure it is here to stay.

Then there's death, the other sure thing.

Wasn't income tax brought in during WW I as a temporary measure?

When is temporary up?

It used to be if a visitor to Canada kept his receipts for purchases made in the country he could submit those receipts on leaving the country for a tax refund.

Does that still apply.

If so, maybe that's an answer to at least one question.

And, if you don't have to pay tax on articles bought at a second-hand store; does that mean if you buy used stamps or previously-owned stamps at a stamp dealer you don't have to pay tax?

Methinks a can of worms has been opened.



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johnstamp
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Philippines
1127 Posts

Posted 01/20/2011  04:23 am  Show Profile Bookmark this reply Add johnstamp to your friends list  Get a Link to this Reply

none in the Philippines

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Ryan
Pillar Of The Community


Canada
737 Posts

Posted 01/20/2011  05:21 am  Show Profile Bookmark this reply Add Ryan to your friends list  Get a Link to this Reply


Quote:
It used to be if a visitor to Canada kept his receipts for purchases made in the country he could submit those receipts on leaving the country for a tax refund.

Does that still apply.

Not any more, no. There is still a provision for GST refunds on the accommodation portion of tours in Canada for non-residents, or some such thing, but that's all that remains for GST rebates for non-residents, I think.

http://www.cra-arc.gc.ca/E/pub/gi/n...ce221-e.html

Ryan


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Battlestamps
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United States
1604 Posts

Posted 01/20/2011  07:16 am  Show Profile Check Battlestamps's eBay Listings Bookmark this reply Add Battlestamps to your friends list  Get a Link to this Reply

I live in the U.S. and use to order Canadian mint stamp from the Canada Post and did not have to pay any tax or shipping. I always thought it was weird that I could buy Canadian stamps less than what Candians could. It was the same for mnay of the European nations too.

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Puzzler
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Canada
6325 Posts

Posted 01/20/2011  10:26 am  Show Profile Bookmark this reply Add Puzzler to your friends list  Get a Link to this Reply


Quote:
However, if you mail a registered letter overseas ($12.95) and pay at the counter and they apply a postal meter (which I just recently did), there is no tax at all.


You may also ask them to use stamps.

Some clerks think that you are paying for the stamp and the stamp is a product and is somehow worth the dollar figure printed on the stamp (plus tax) but actually you are paying for the service provided and the stamp (just worth 1/2 cent or so probably), with a cancel, is acknowledgment of the payment of the service.

They would never have issued stamps in the first place if everyone would come down to the post office to mail their letters as then there would be no need for them. Proof of payment of service provided would be indicated by the postmaster on the item posted.

When they use meter stamps they are actually making a bit of money at the franchise or associate Canada Post stores located in drug stores (or even in a government run Canada Post outlet). When you use postage stamps they do not make as much money as they have to pay more for them from the Post Office.

But for proof of payment for a service provided they are doing the same job and are to be considered the same thing for that purpose.

So, if you paid for stamps (ask for them please) to be used, immediately at the post office while you are there, on a registered letter to the US or International (cost of registered service $12.95 Canadian) plus cost of postal delivery service provided to the US (#1.03 cents for a 30 gram (1 oz) letter) then, as the total amount paid is over $5.00, you will not have to pay any tax at all on this service.

I think this is considered to be something purchased by a foreign entity (person).

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BeeSee
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Canada
4556 Posts

Posted 01/20/2011  11:52 am  Show Profile Check BeeSee's eBay Listings Bookmark this reply Add BeeSee to your friends list  Get a Link to this Reply

Nice information Puzzler.

I never really thought much about the tax until Litho started this thread.


Quote:
When you use postage stamps they do not make as much money as they have to pay more for them from the Post Office.


Puzzler, I do not think that is correct. It costs them the same for stamps and meters, as the franchise offices make money (a certain percentage) on the amount of POSTAGE they sell, not the method, so it should not matter whether it is metered or stamps.

I just checked with the accountant where I worked. We use metered mail and stamps (occasionally). When the meter machine is filled, full 12% tax is payed, so no matter where the mail is sent, tax is therefore paid on all individual items.

However, when she goes into the Post Office and pays cash for a parcel to the U.S., and a meter is applied, there is no tax!

Also, she just bought several booklets of the new $1.03 rate stamps to the US (and each booklet is clearly marked "US Rate") she had to pay tax!

The bottom line is that collectors are getting dinged for using stamps on International mail.

Something is not right here!




BeeSee in BC
"The Postmark is Mightier than the Stamp"
http://brcstamps.com ---- BNAPS, RPSC, APS

Edited by BeeSee - 01/20/2011 11:55 am
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lithograving
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Canada
3072 Posts

Posted 01/20/2011  12:33 pm  Show Profile Bookmark this reply Add lithograving to your friends list  Get a Link to this Reply


Quote:
I always thought it was weird that I could buy Canadian stamps less than what Canadians could.


You're right that is weird Battlestamps, someone could actually profit
from this.
Maybe we Canadians should all have a proxy in the US buying stamps for
us.

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Puzzler
Pillar Of The Community


Canada
6325 Posts

Posted 01/20/2011  1:22 pm  Show Profile Bookmark this reply Add Puzzler to your friends list  Get a Link to this Reply


Quote:
However, when she goes into the Post Office and pays cash for a parcel to the U.S., and a meter is applied, there is no tax!


Also if she had asked for stamps to be used tax would not have been charged.


Quote:
Also, she just bought several booklets of the new $1.03 rate stamps to the US (and each booklet is clearly marked "US Rate") she had to pay tax!


She was buying stamps that could also be used to mail letters (over weight) or parcels within Canada so yes she was charged tax. They could not tell nor guarantee what the person would be using the stamps for. Same for meter machines taken to the post office and paid for there (loaded up with postage (xx amount of dollars)).

It is only when the postal clerk is using stamps (postage or meter) at the post office to mail something to the US or further on or pay for an added service for those destinations (out of country) that you do not pay the tax. It must be done there where they can guarantee the proper use of such non-taxable items (services).

I remember Wnglwr posting something about the cost of metered postage that the post office pays for as compared to postage stamps having a difference in price. I searched but could not find it. Something like 5% or 10% difference perhaps. So, thus, the clerks were encouraged to sell with metered postage rather than stamps as the franchise would make more in the long run. I need to have a database like Rod's to keep all this info handy.

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BeeSee
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Stamp Community SupporterSupporter!


Canada
4556 Posts

Posted 01/20/2011  1:47 pm  Show Profile Check BeeSee's eBay Listings Bookmark this reply Add BeeSee to your friends list  Get a Link to this Reply


Quote:
Also if she had asked for stamps to be used tax would not have been charged.


Actually no in her case. She went to the P.O. because the meter machine ran out, and mailed two letters to the U.S. They gave here two stamps, she stuck them on right there and paid tax. She mailed one parcel to the US, they applied a meter. No tax. She just showed me the receipt. This was at a main post office, not a franchise. When I next go there, I will ask. The staff are very friendly and they know me, I buy most of my stamps there.

As for the percent profit on sales, I am going by what the owner at one of the local franchises told me.

Regardless, all very interesting, and it is obviously a system where at the end of the day, a huge amount of tax is collected which should not be collected.

This would seem to encourage dealers who send plenty of orders out of the country NOT to use stamps on their mail - 12% savings.

Edit: It just occurred to me Puzzler, it may be different in BC than NS.


BeeSee in BC
"The Postmark is Mightier than the Stamp"
http://brcstamps.com ---- BNAPS, RPSC, APS

Edited by BeeSee - 01/20/2011 1:52 pm
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backroads
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Canada
707 Posts

Posted 01/20/2011  2:11 pm  Show Profile Bookmark this reply Add backroads to your friends list  Get a Link to this Reply

Weighing in on this topic because I recently had a coversation with a clerk at a Drug Store sub-post. Metered parcels are always tax free out of the country because the computer program for the cash register is set up that way. Loose stamps for the same purpose are almost always taxed because they are being sold as a product and the programmed cash register has no simple way around it. They are not trained with any way to over-ride this program. Even booklets of US or Overseas rate stamps have no special category that gives them tax exemption. When I mail things downtown specifically at the philatelic counter, the clerk there does have the ability to not charge tax for stamps used at source on foreign parcels.

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Puzzler
Pillar Of The Community


Canada
6325 Posts

Posted 01/20/2011  2:18 pm  Show Profile Bookmark this reply Add Puzzler to your friends list  Get a Link to this Reply


Quote:
Actually no in her case. She went to the P.O. because the meter machine ran out, and mailed two letters to the U.S. They gave here two stamps, she stuck them on right there and paid tax. She mailed one parcel to the US, they applied a meter. No tax.


Actually that agrees with what I posted. The amount paid (and it probably has to be for a single package ) has to be over $5.00 .

If she had used stamps (asked the postal clerk for them, and purchased them there from the clerk, to be applied rather than meter postage) on the parcel, she would not have paid tax as the amount would have been over the $5.00.


So, technically, yes everyone is paying tax on under $5.00 items at the post office that are used on outside of Canada mailings. Perhaps it is a question of whether it is worth it in time spent to keep track of every little transaction. Perhaps Canada Post has a special exemption for this?

When you just buy stamps and take them with you you are buying a product in Canada. When you pay (over $5.00) for an service that has a destination outside Canada then no tax is applicable. At least that is how I am phrasing it from my dealings with the post office here. I called and asked again just now.

The difference between BC and NS is a possibility but not with the federal tax.

Litho, I apologize for diverting the original question away from you original question about whether other people outside of Canada pay tax on their purchases of stamps or services. A good question and one I have been wondering about also.

edit: fixed the quote.


Edited by Puzzler - 01/20/2011 2:31 pm
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BeeSee
Pillar Of The Community
Stamp Community SupporterSupporter!


Canada
4556 Posts

Posted 01/20/2011  2:20 pm  Show Profile Check BeeSee's eBay Listings Bookmark this reply Add BeeSee to your friends list  Get a Link to this Reply


Quote:
When I mail things downtown specifically at the philatelic counter, the clerk there does have the ability to not charge tax for stamps used at source on foreign parcels.


Well Backroads, since you are in BC too it must be the same at my post office - I never thought of asking for a tax exemption before, until this thread came up. Like I said, I will find out...


BeeSee in BC
"The Postmark is Mightier than the Stamp"
http://brcstamps.com ---- BNAPS, RPSC, APS

Edited by BeeSee - 01/20/2011 2:21 pm
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BeeSee
Pillar Of The Community
Stamp Community SupporterSupporter!


Canada
4556 Posts

Posted 01/20/2011  2:29 pm  Show Profile Check BeeSee's eBay Listings Bookmark this reply Add BeeSee to your friends list  Get a Link to this Reply

Well Puzzler, the $5.00 minimum charge does explain it.

But...


Quote:
Perhaps it is a question of whether it is worth it in time spent to keep track of every little transaction.


If they can make it $5, they can easily make it it $1.05, the lowest outside-of-Canada rate. An override is an override. Canada Post does not get this extra money, it goes to Revenue Canada.

We are being ripped off.




BeeSee in BC
"The Postmark is Mightier than the Stamp"
http://brcstamps.com ---- BNAPS, RPSC, APS
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