Buying out of province | Page 2 | GTAMotorcycle.com

Buying out of province

If the deal is good enough buy 2 or 3 and flip them for profit!
 
blackcamaro said:
Taxes should be charged based on where delivery takes place. If it is picked up at the dealer then the taxes should be charged as a local buyer. If it is shipped to the buyer in their home province then it is charged at their tax rate.
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That is incorrect. The dealership should charge the appropriate tax rate based on clients residence and where its going to be registered. If you pay local taxes then you need to pay your own provincial taxes before you can register it and apply for a refund for the tax you already paid.

When we've sold out of province we always charge their provincial tax and remit to the appropriate channel. It's then either driven with a transit plate or shipped, then registered at their local licensing office. Client doesn't have to deal with anything other than licensing.

I'm speaking from experience and directions received from the manufacturer, financing company and dealership controller whenever I encountered an out of province purchaser. When I was with Nissan about a decade ago, they actually sent out a dealer memo clarifying that the clients tax rate was to be based on their province of residence as many QC residents were crossing the border to save tax, and apparently that was a big no-no.

Also, any dealership desking software or finance company portal I've used automatically applies tax based on the province of residence we enter, so I'm pretty confident that is the correct way to do it.
 
When we bought our Ioniq in Quebec the dealer said they were obligated to charge and submit the QC taxes, however, they did did say that within 24 hours of the sale they would generate a cheque for the amount of the taxes we paid, and courier it to us. I think we might have actually got it the day we purchased the vehicle had things not run late and their accounting lady had already gone home. They basically were obligated to collect the taxes on paper, but knew that since the vehicle was "exported" from the province that they would be not actually payable, but there was a procedural delay between the two that they covered on our behalf so we didn't need to file all sorts of paperwork with quebec directly I guess, something that probably is time consuming and confusing, but they apparently dealt with all the time.

We then drove the car home on the transit plate (that they provided, some dealerships have the ability to generate their own there apparently) and registered it here, but were indeed required to pay the taxes again. Deposited the cheque in the bank, used that to pay the taxes here in Ontario...done deal.
 
Michael0124 said:
That is incorrect. The dealership should charge the appropriate tax rate based on clients residence and where its going to be registered. If you pay local taxes then you need to pay your own provincial taxes before you can register it and apply for a refund for the tax you already paid.

When we've sold out of province we always charge their provincial tax and remit to the appropriate channel. It's then either driven with a transit plate or shipped, then registered at their local licensing office. Client doesn't have to deal with anything other than licensing.

I'm speaking from experience and directions received from the manufacturer, financing company and dealership controller whenever I encountered an out of province purchaser. When I was with Nissan about a decade ago, they actually sent out a dealer memo clarifying that the clients tax rate was to be based on their province of residence as many QC residents were crossing the border to save tax, and apparently that was a big no-no.

Also, any dealership desking software or finance company portal I've used automatically applies tax based on the province of residence we enter, so I'm pretty confident that is the correct way to do it.
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“What are the Rules for Sales to out-of-province purchasers?

Put simply:
If delivery takes place in Ontario, then 13% HST will apply to the sale, regardless of where the customer lives.
If delivery takes place outside of Ontario, the tax applicable to that province should be charged.
Delivery takes place where the customer is considered to take possession of the vehicle.
  • If the customer picks the vehicle up in Ontario and drives it home, delivery takes place in Ontario
  • If the vehicle is shipped out-of-province with the buyer shown as consignor on the bill of lading, delivery takes place in Ontario. It does not matter who actually pays the shipping invoice.
  • If the vehicle is shipped out of province with the selling dealer shown as consignor on the bill of lading, then delivery takes place in the destination province. It does not matter who actually pays the shipping invoice.”
HST - The Used Car Dealers Association of Ontario

It’s where delivery of the vehicle takes place. If you can provide a link that shows otherwise I would be interested to take a look.
 
Michael0124 said:
The dealership should charge the appropriate tax rate based on clients residence and where its going to be registered.
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This is incorrect. If I'm buying a vehicle here in Ontario and want to put it on a trailer and move to BC tomorrow, Ontario has no way to remit taxes to a different province on my behalf, much less adjust anything in their system to said other provinces tax rate.
 
You will pay the local taxes upon sale. Dealer will provide a transit permit to get the vehicle home.
Once in Ontario you have to have an out of province inspection done, then you pay the pst only on upon registration. You can then apply to have your taxes returned to you from the province of purchase.
I just went through all this when my vehicle was totaled in Alberta on vacation and I was seriously considering buying out there.

Sent from my SM-A530W using Tapatalk
 
Looks like my comments struck a bit of a nerve here. To be fair, after reading it back I wasn’t very clear, and I wasn’t exactly correct either, so I’ll try to put it all down here.

Regarding our system changing the taxes, I was incorrect in saying that the dealer will charge the tax based on province of residence. I was thinking of interest rates and incentives that need to be applied based on province of residence/registration. I’m going to blame that on posting at the end of a long day and not enough water in my whiskey, lol. My apologies for the error on my part and any confusion it may have caused.

I called Service Ontario and they said you will have to pay the difference in taxes to be able to register it in Ontario, new or used. If you pay more (QC for example) you can apply for a refund on the excess tax paid.

I spoke with three manufacturer lenders, and they all said we are to charge the tax based on point of sale UNLESS they are leasing, then we charge the province of residence tax. It has to do with who remits the taxes...cash or finance we do, lease they do.

In response to @PrivatePilot, unless a dealer has a RIN in that province, you are correct that we cannot remit to them. Manufacturers have a RIN in every province and because they collect the tax on a monthly basis for a lease they remit. We collect tax up front on cash or finance, so we need to remit locally, and the purchaser pays the difference when registering back home. When we select the lease option, that is when it automatically changes the tax rate along with interest/incentive eligibility. That’s where I got confused and made the error...when I was in automotive retail much of our business was leasing so that was what I experienced most of the time.

So, after all that the short answer is you pay the local tax at point of sale, but to register it here in Ontario you must pay the difference to Service Ontario. Hopefully, this clears it up, and again sorry for any confusion I may have caused.
 
I just assume that the OP is NOT financing / leasing so it should be a fairly straightforward process. I believe that dealers won't lease/finance to out of province buyers.
 
mimico_polak said:
I just assume that the OP is NOT financing / leasing so it should be a fairly straightforward process. I believe that dealers won't lease/finance to out of province buyers.
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What. Why wouldn’t they? Banks are banks and what about in house (OEM financing).
 
Evoex said:
What. Why wouldn’t they? Banks are banks and what about in house (OEM financing).
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When I was looking to buy a car and drive it home from BC to Toronto every dealer told me the same. 'We can't finance to out of province customers'. Only cash.

Not sure about the reason, didn't bother looking into it because then reality came in and I realized it would make for an awesome road trip...but a horrible idea...and the wife nixed it pretty quick.
 
mimico_polak said:
I just assume that the OP is NOT financing / leasing so it should be a fairly straightforward process. I believe that dealers won't lease/finance to out of province buyers.
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Most won't, they like to keep the business local for future revenue. Financing through your local dealer usually drives you to service with them as well.
mimico_polak said:
When I was looking to buy a car and drive it home from BC to Toronto every dealer told me the same. 'We can't finance to out of province customers'. Only cash.

Not sure about the reason, didn't bother looking into it because then reality came in and I realized it would make for an awesome road trip...but a horrible idea...and the wife nixed it pretty quick.
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It's a pain to work through for the dealer, but they can do it. Here in Ontario at least we can, not sure the rules in other provinces. The times I've done it it was tedious to say the least. Cash is king for dealers in these situations, that way nothing for them to do other than deposit the cheque.
 
From the horse's mouth:

General Information for GST/HST Registrants - Canada.ca

This guide provides basic information about GST/HST, including registration, charging and collecting the tax, input tax credits, filing GST/HST returns, real property, and more.
www.canada.ca www.canada.ca

Rules for motor vehicles​

Sales​

Sales by registrants​

Under the general place of supply rules described on the previous pages for sales of goods, the supply of a specified motor vehicle by way of sale is made in a province if the supplier delivers the vehicle or makes it available in the province to the recipient of the supply.
The application of this place of supply rule is generally based on the province in which legal delivery of the vehicle to the recipient occurs.
However, for purposes of this rule, a vehicle is also deemed to be delivered in a province if the supplier:
  • ships the vehicle to a destination in the province specified in the contract for carriage of the vehicle; or
  • transfers possession of the vehicle to a common carrier or consignee that the supplier has retained on behalf of the recipient to ship the vehicle to the province.
In addition, a special place of supply rule in respect of specified motor vehicles deems the sale of a motor vehicle to be made in a particular province in which the vehicle is registered, other than temporarily, if that registration occurs no more than seven days after the day the vehicle is delivered to the recipient in a participating province (other than the particular province) and the supplier maintains satisfactory evidence of that registration.
You may have to pay the provincial part of the HST when you bring a vehicle into a participating province from another province or from outside Canada and you were not required to pay the provincial part of the HST at the rate for the participating province in respect of the supply or taxable importation of the vehicle.
You generally have to pay the provincial part of the tax when you register your vehicle. Your provincial motor vehicle registration office will collect the provincial part of the HST for the CRA. If you are not required to register the vehicle, you may still have to pay the provincial part of the HST directly to the CRA by self-assessment on your GST/HST return.
You generally have to self-assess the provincial part of the HST for a motor vehicle, or an amount of the provincial part of the HST, that reflects the difference in the HST rates between the provinces, if you:
  • bring the vehicle from a province with a lower HST rate or a non-participating province; or
  • import the vehicle into the participating province and the provincial laws relating to motor vehicle registration do not require you to register the motor vehicle in that province
 
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