How does the registration work anyway? When they buy a used car to sell does the title get transfered to them or what? Curious minds...
do used car dealerships pay tax when they buy inventory vehicles?
- Thread starter mmmnaked
- Start date
No, when the used dealer picks the car up from the auction, there is no change in ownership and hence no HST charged.
The dealers use the red dealer plates that you see hanging from the trunk in a black pouch in order to drive the car to the dealership.
When they sell you the car, they charge HST and funnel it to the gov't eventually after writing off their own business related HST expenses.
Not true.
If that was true, then they'd be transfering the title directly to you from the previous owner? Doesn't sound right...
So the taxes they paid when buying the car for resale are basically recouped once they sell the vehicle?
Yes, pretty much. Are you looking to get into the used car business or what?
The dealer pays HST but gets it back or doesn't remit that amount of HST when it remits the HST it collects from the consumer. The consumer is the only one paying HST, business are allowed to claim back HST spent on business expenses. Hence why a lot of business owners keep their receipts for meals and such as they claim back all the HST for it.
DaveG
Active member
Businesses file an HST return usually monthly.
They remit HST collected on sales less HST paid on purchases.
On meals only 50% of the HST may be deducted. Natural gas and hydro also have a strange formula as the HST may be deducted but not the PST portion. Even further complicated if used in manufacturing.
They remit HST collected on sales less HST paid on purchases.
On meals only 50% of the HST may be deducted. Natural gas and hydro also have a strange formula as the HST may be deducted but not the PST portion. Even further complicated if used in manufacturing.
I know the rest I just wasn't sure with cars.
So if a dealer buys a car for 10k he pays $1300 in taxes on it. When he turns around to sell it for 15k he collects $1950 in HST, and hands over $650 of it to the gov?
Yes.
Depending on the size of business the government may require you the remit annually, quarterly or monthly. Most small businesses remit quarterly. In the first year of operation of the business you can remit annually which is what I did last year. We collected 100k in HST and put that in a savings account for the year lol.
Yeah Ontario has some wacky rules on what applies on HST. Food is some of the most complicated for some reason to the point of it being retarded.
Did not know there was even a PST portion on the hydro/gas. We claimed the entire HST for gas/hydro. I will ask my accountant later about this. Thanks!
