Tag: tax gst pst import

I’ve often wondered why so many U.S. online com­pan­ies won’t sell to people liv­ing in Canada. It’s a smal­ler mar­ket, to be sure, but not trivi­al, in fact big­ger than most U.S. states. I’ve recently dis­covered a large part of the reas­on — Canada’s import pro­ced­ures and tax laws.

Tim’s blog costs a reas­on­able amount to keep going, so we thought it might be nice to come up with some way to defray some of that. His pho­tos are pop­u­lar, so we figured to do some­thing with that, prefer­ably using drop ship­ping so we don’t have to invest in an invent­ory of things that might not sell at all. The idea, after all, is to make a little money, not have invent­ory sit­ting around that nobody wants. With drop-ship­ping we col­lect the money, send the order to the com­pany cre­at­ing the item, and they ship it dir­ectly to the end customer.

I try to do the right thing in terms of pay­ing taxes etc, so I star­ted phoning the rel­ev­ant agen­cies to find out the answer to one big ques­tion: how do I make sure the end cus­tom­er isn’t charged the Cana­dian sales taxes (GST for Canada, PST for BC) twice, while still allow­ing the com­pany to ship to them directly? 

The answer is: you can­’t. Not leg­ally, any­way. By law, if I sell some­thing to someone who lives in Canada, I have to col­lect the GST (and PST if they live in BC). When the item comes across the bor­der into Canada, if it’s shipped dir­ectly to the cus­tom­er, they have to pay it again. Leg­ally I can­’t not col­lect it on the grounds that they will pay it, and leg­ally they can­’t not pay it on the grounds that I already col­lec­ted it from them. I could engage a cus­toms broker to do this, but they’re far too expens­ive for me to con­tem­plate at this stage. The only leg­al way for the cus­tom­er to avoid pay­ing the taxes twice is if I have the item shipped to me, and then I ship it on to them. Which increases the cost of ship­ping, increases the deliv­ery time, and neg­ates much of the point of drop shipping.

Now I’m try­ing to fig­ure out the options. There’s the option of selling only to U.S. people, which seems weird since I live in Canada. There’s the option of telling Cana­dians that their deliv­ery will take a lot longer, since it has to be sent to me and then I’ll send it on (and I do have oth­er things to do with my time). There’s the option of recom­mend­ing they use some ser­vice that does this for them. And there’s the option of giv­ing up on the whole endeav­our. None of those options are par­tic­u­larly appealing.

Help­ful com­ments and sug­ges­tions are welcome!