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Locked: GST/PST/HST on used products

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  • Jan 20th, 2005 12:15 pm
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Deal Addict
Aug 7, 2003
2799 posts
6 upvotes

GST/PST/HST on used products

Is it legal for stores to charge sales taxes on used goods? I was in EB games, and they charge tax on all their used products. Now that didnt stop me from making a purchase, but i remember in my Econ 101 or 102 class (long time ago), that there was something about how the selling of used goods isnt included ina country's GDP (Gross Domestic Product) or GNP (Gross National Product).

So don't stores like EB Games, blockbuster, rogers video (as i know they sell used games/dvds and charge tax on them) potentially overstate the country's GNP or GDP (if the product was produced in canada).

Maybe im thinking too deeply into this, but i swear our prof said it was illegal to charge tax on used goods. Does that mean that the stores mentioned above are pocketing the tax they charge us? What about pawn shops...never been in one, but do they charge tax?

thoughts...
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Deal Guru
User avatar
Jun 28, 2004
10349 posts
6 upvotes
GNP and GDP have absolutely no relation to taxes?
So long. I'm outta here.
Deal Addict
User avatar
Dec 8, 2001
4104 posts
46 upvotes
I remember a convo on the radio about this and used cars. I think when someone sells the old car, they are supposed to charge tax, and when someone buys the used item they are supposed to pay tax as well.

So, the tax you pay is the tax on the new car minus the tax on the car you traded in.
Member
Mar 2, 2002
300 posts
fl4wless wrote:Is it legal for stores to charge sales taxes on used goods? I was in EB games, and they charge tax on all their used products. Now that didnt stop me from making a purchase, but i remember in my Econ 101 or 102 class (long time ago), that there was something about how the selling of used goods isnt included ina country's GDP (Gross Domestic Product) or GNP (Gross National Product).

So don't stores like EB Games, blockbuster, rogers video (as i know they sell used games/dvds and charge tax on them) potentially overstate the country's GNP or GDP (if the product was produced in canada).

Maybe im thinking too deeply into this, but i swear our prof said it was illegal to charge tax on used goods. Does that mean that the stores mentioned above are pocketing the tax they charge us? What about pawn shops...never been in one, but do they charge tax?

thoughts...
I believe, and I haven't done a tax course in about 3 years, that cars are the only thing exempt from GST when they are sold used. I think....

For general business, taxes are charged on everything, excepting that which is specifically exempted. Check your invoice next time, and see if the taxes are listed.. if they are, you better bet EB is remitting them.
Deal Expert
User avatar
Sep 19, 2004
18005 posts
2296 upvotes
Waterloo
GDP (Y) = Consumption + Investment + Gov't Purchase + NX (Net Export)
GNP = GDP + NFP
so I think tax is out of the question

ha ha, I hate how there is tax on EVERYTHING in Canada
In Asia, tax is usually included, or avoided ;)
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Deal Addict
Jan 22, 2004
3168 posts
36 upvotes
Toronto
The store is required by law to charge you taxes when they sell you something whether it is new or old.

Exception is if you have a PST exemption number for PST.

No exemption for GST but you can deduct the GST you paid from the GST you collect when you re-sell the goods, ie you remit the difference.
Deal Fanatic
Sep 16, 2004
5845 posts
431 upvotes
Most countries only allow taxes on new items and on items where value has been added in which case there is a value aded tax or VAT.

Our very smart govt have found a way to bring in taxes on everything sold legally whether it be used or new by way of the GST and provincial taxes.

My tax teacher did give some argument why GST is essentially better and fairer than a Value added tax but i did not believe it for a second and so took no notice of it.

Possibly might benefit businesses that could reclaim GST on items they paid taxes on and then sold or use in their business but the GST rebates ordinary non business owner citizens get back is nothing compared to the amounts the gov't has collected on non value added,depreciated used items. Thats the way the crooks we call politicians bring in so much taxes and do with it as they please.
Banned
User avatar
Aug 3, 2003
970 posts
1 upvote
Calgary, AB
What are these PST and HST thing? :lol: :cheesygri :lol:
Deal Fanatic
User avatar
Oct 3, 2004
5441 posts
107 upvotes
u albertians and your no PST law....... :twisted:

but wat is HST?
Banned
User avatar
Aug 3, 2003
970 posts
1 upvote
Calgary, AB
a) no PST is not a law, its simply a benefit that comes with living in the best and richest province.

b) HST is Harmonized Sales Tax. Its a combination of both GST and PST rolled up into one *HARMONIZED* percent. Not gonna google it, but I believe its only used in the maritimes. haha, those newfies and their crazy antics.
Member
Mar 7, 2004
349 posts
43 upvotes
Generally speaking, GST is payable whenever a person buys property or service from another person who is providing the property or service in the course of a business. It generally doesn't matter that the property is used property. That's why you pay GST when you buy a used game from EB Games but don't if you buy it from, say, a kid who is just selling off his collection of games since the kid isn't doing as part of a business.

Taxing the sale of used property does introduce the potential for double taxation. This problem was originally addressed by the use of tax credits available to the person selling the used good so that, in theory, they could sell it for a lower price to compensate for the embedded tax but this credit was so frequently abused that they had to repeal it. The elimination of this credit was partially offset by allowing, for example, a person trading in a car to get credit for the value of the trade-in so that tax would only apply to the difference in the price of the new car and the trade-in value.
Banned
Jan 11, 2004
19816 posts
553 upvotes
Kazaam wrote:a) no PST is not a law, its simply a benefit that comes with living in the best and richest province.

b) HST is Harmonized Sales Tax. Its a combination of both GST and PST rolled up into one *HARMONIZED* percent. Not gonna google it, but I believe its only used in the maritimes. haha, those newfies and their crazy antics.
i wouldnt call a hicktown in the middle of the canadian shield the best province. Toronto is like New York and Alberta is more like texas. not too many civilized or cultured people would say texas is better than NY. :cheesygri
Sr. Member
User avatar
May 19, 2004
547 posts
Nova Scotia
Kazaam wrote: b) HST is Harmonized Sales Tax. Its a combination of both GST and PST rolled up into one *HARMONIZED* percent. Not gonna google it, but I believe its only used in the maritimes. haha, those newfies and their crazy antics.

I think the Newfs don't have the HST (or BST - blended sales tax, or bullsh*t tax). NS, PEI and NB do.
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