Who Pays Cross Border Taxes
There are many instances in which Canadians travel across the border into the U.S. and vice versa when Americans cross the border and enter Canada for the sole purpose of shopping. It tends to happen much more with the first group than the latter but nonetheless border cross shopping is indeed a real phenomenon.
Don't forget that businesses get to claim qualified HST expense for virtually everything from paper clips to home renovations, according to Mark Purdy of RentalRebate.ca.
Whatever the reason for border cross shopping is, be it to take advantage of Canadian Boxing Day deals or American Black Friday deals, it's good to know what the border cross tax paying situation is before you go on your shopping excursion. To pay cross border tax means you are attempting to cross the border with products purchased in a different country.
The amount you have to pay in cross border taxes is what you need to be aware of so you can be cognizant of the taxes you may or may not have to pay while you're shopping. It might nice to buy a discounted TV but what will you have to pay in cross border taxes on it, if any? Knowing the cross border taxes could influence your decision to buy that TV or not.
When crossing the border from American soil to Canadian soil there are some personal exemptions that makes thing a little bit easier on you. If you are out of the country for less than 24 hours you can bring with you across the border $50 worth of tax-free goods, if you've been out of the country for 48 hours that personal exemption is bumped up to $400, and for out of country travel that lasts a week you are allowed to claim $750 worth of tax-free goods. There are some exceptions on items like cigarettes and alcohol.
For purchases that go above your personal exemption the tax you have to pay will depend on where you live and what border you're crossing. Crossing from the US into Canada will see you have to pay a 7% duty tax rate, as well as the GST/HST rates in your province of residence on goods up to $300 over your personal exemption. Crossing into U.S. soil from Canada the duty rate is 3% on items up to $1,000 over the personal exemption rate.