Canada/US customs - border crossing tax's on purchases - Tax on Shipping Fees??

Question

I am a Canadian citizen, and I live in a border city with the US. (Windsor, Ontario/ Detroit Michigan)

Because of this I have family who are also Canadian citizens but work in the US.

I shop online often, and have things shipped to my brothers work in Michigan since many online shops don't ship to Canada.

When you declare goods at the border on our way back over to Canada, they charge tax on anything purchased in the US. (Since tax in Michigan is 6% but Ontario tax is 13%)

My question is, if I purchased an item for say $5 and shipping cost $100. Would I be taxed on $5, or $105?? (this is not the case, its only simpler to explain this way)

Can customs charge tax on the shipping (service) costs? Or just the product that physically crosses the border?

Answer 1

Yes, you can be charged taxes on the shipping cost as well.  But you can bring quite a lot across the border duty free, depending on how long you are in the US, so make sure you know what your allowances are.  If you stay for 24 hours you can claim up to $50 of goods without paying duties, and it you stay 48 hours you can claim up to $400 and if you stay 7 days you can claim up to $750 withoug paying duty.  Two people can combine their amounts.  These links may help you.  Best of luck.

Answer 2

It sounds strange but its true. The cost of item for customs purpose if the total cost including the shipping up to the last point from where if began uninterrupted journey to Canada. So if it was shipped to some where in US that gets added to it. It may be a good idea to take the items and not the box that it was shipped in. Also there is a substantial allowance that one can exercise if you bring the article with you in person. even if you go there just for a day. The customs agents are not so sticky about small articles.

You have to understand that the value of goods is not just the cost out of factory. It also includes the cost of other issues such as POSTAGE or freight upto the last point before it starts its travel to Canada. So if you ship some thing from China to Canada then the freight is not counted but if you ship it to Mexico and then some one in Mexico sends it to you then the price includes the cost upto Mexico. Same is the case here.

Further to this, if the package is inspected then the value is what is assessed by the customs agent and not what you say it is. You can always pay the duty, collect the goods and then later file for revision. It could be to your advantage or disadvantage. Believe me, the customs will send you a refund if they owe you or feel that the value was over assessed.

Answer 3

Sad but true - you will be taxed on the full value including shipping.  There are a ton of places online that you can shop with no shipping/brokerage fees.  I use a site called Canbuy.ca