# Excise Tax and Importing



## KaeJS (Sep 28, 2010)

So, I ordered some tobacco from the United States months ago. Paid for it when UPS came to my door at $21.65. This was around March.

Then on July 6, i get an invoice for $88.48. I call UPS and the Agent tells me not to worry about it as I do not have to pay and they made a mistake.

Now I get home today and I receive a collections notice for $66.83 (88.48 - 21.65).

I can see the Excise Tax is $49.17. Is this possible? I ordered less than 50 grams of tobacco and I thought this was taken care of by UPS.

Why would I receive an invoice for 88.48, and then receive a collection for it later for a different amount?

Can someone explain to me what Excise Tax is? I have googled it and I still don't get it. It says it is for "inland" products. This product came from the United States. How is it considered an INLAND product?

The Excise Tax is more than 3x what the tobacco is worth. Who in their right mind would order tobacco? It says the Duty Value on the Tobacco is $12.93.

Really? I am going to pay $49.17 in Excise Tax for Tobacco valued at $12.93?

That's gotta be a joke. Someone please help, cause I spoke with two useless UPS phone agents and they can't help me. They just keep saying "Show proof of payment"

Next thing, my credit is going to be affected because of this.


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## the-royal-mail (Dec 11, 2009)

Never order stuff from the US using UPS shipment. They charge brokerage fees of at least $20 based on the declared value of the shipment. Always use the Royal Mail (aka "Canada Post") when ordering stuff from the US.


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## KaeJS (Sep 28, 2010)

Does anybody know if this will affect my credit?

I have perfect credit and I don't want it to be lowered over something silly like this.


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## ddkay (Nov 20, 2010)

Ugh, I hate when stuff like this happens. It's really easier to settle your balance than argue with them. They know this. If you can fight it and think you'll win and wont be bothered for going the extra mile give it a shot, just don't let them sell your debt to a collector.

Also agree with TRM, anyone except USPS/Canada Post have ridiculously high import fees, I imported some electronics a few months ago and UPS decided to take ON TOP of the original shipping cost, an extra 1/3 of the declared value as C.O.D.


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## carverman (Nov 8, 2010)

KaeJS said:


> So, I ordered some tobacco from the United States months ago. Paid for it when UPS came to my door at $21.65. This was around March.
> 
> Can someone explain to me what Excise Tax is? I have googled it and I still don't get it. It says it is for "inland" products. This product came from the United States. How is it considered an INLAND product?
> 
> The Excise Tax is more than 3x what the tobacco is worth. Who in their right mind would order tobacco? It says the Duty Value on the Tobacco is $12.93.


You should have checked first and known basically what it was going to cost
you BEFORE IMPORTING IT. 

UPS only is concerned with shipping fees, brokerage fees, any duties, and some taxes (like HST in Ontario). 
They send in the paperwork to the Federal Govt (CRA). The appropriate branches of the CRA will examine your invoice and calculate any excise taxes on tobacco or alcohol products payable and send you a bill.

If you were bringing in tobacco or alcohol from the US, that you declared, the Border Guards would determine AT THE BORDER CHECKPOINT, all taxes, payable to bring those goods into Canada, including excise tax on your goods.
More than likely on tobacco and alcohol, it would amount to at least DOUBLE what those same goods would cost you if bought in Canada

BTW..if you don't declare those goods..they have the right to seize and impound your vehicle! 



> Really? I am going to pay $49.17 in Excise Tax for Tobacco valued at $12.93?


If that's what they calculated, that's (probably) what you will have to pay the Federal gov't for importing it. They want their tobacco taxes, and as a smoker you have to pay for them one way or another.

When you are importing tobacco products from the US, they really sock it
to you..unless you go over the border yourself, spend at least 48 hrs there,
bring it back with you, and declare it as part of your personal exemption.

The excise tax also applies to beer, wine and alcohol products.

Scroll down to "ONTARIO" to see what the taxes, duties and excise taxes
are on tobacco products imported into Canada. 
http://www.nsra-adnf.ca/cms/index.cfm?group_id=1199



> That's gotta be a joke. Someone please help, cause I spoke with two useless UPS phone agents and they can't help me. They just keep saying "Show proof of payment"


Well. they may be wrong.. but in any case, this is now between you 
and the CRA now. 
I would suggest to pay it, and be the wiser for it next time, but
there may be an appeal process to CRA, IF you have all the facts on how
much tobacco you imported, and what the excise tax calculated should be on the amount you imported..and good luck with that!

<extraction from online sources>
Both the federal and provincial governments impose excise taxes on inelastic goods such as cigarettes, gasoline, alcohol, and for vehicle air conditioners.
A great bulk of the retail price of cigarettes and alcohol are excise taxes. The vehicle air conditioner tax is currently set at $100 per air conditioning unit. *Canada has some of the highest rates of taxes on cigarettes and alcohol in the world. These are sometimes referred to as sin taxes.*
<end of extraction.


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## KaeJS (Sep 28, 2010)

carverman said:


> but in any case, this is now between you and the CRA. I would suggest to pay it and be the wiser for it next time.


I guess I don't have a choice. 

No more importing tobacco for me. 

Will call them and make payment arrangements tomorrow.


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## carverman (Nov 8, 2010)

KaeJS said:


> I guess I don't have a choice.
> 
> No more importing tobacco for me.
> 
> Will call them and make payment arrangements tomorrow.


Yes, unfortunately when you are dealing with the Federal gov't and the
excise branch specifically, it can be very time consuming and frustrating
with phone calls and in the end, they still "got you" on importing tobacco,
so you may not have much satisfaction fighting it out with them.


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## carverman (Nov 8, 2010)

the-royal-mail said:


> Never order stuff from the US using UPS shipment. They charge brokerage fees of at least $20 based on the declared value of the shipment. Always use the Royal Mail (aka "Canada Post") when ordering stuff from the US.


I never use UPS on goods imported from the US. I got burned badly a few
years ago with UPS and their excessive customs clearance charges. 
I've been using USPS/CP for years now. CP (which used to be called
the Royal Mail, a 100 years ago ), used to charge $5 for customs
clearance of a package, now it's $8..still a bargain to what UPS here
charges.

If CP needs to collect taxes, they do so right at my door. All I give them
is my CC number and sign for the package. 
I never import alcohol or tobacco products being a non-smoker...and
beer/cheap $8 wine is still cheaper to buy at the LCBO than paying
additional taxes on it. 

Next spring, since I found some free glass carboys, I'm going to try my hand at making even cheaper wine in my house.


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## sags (May 15, 2010)

KaeJS said:


> Does anybody know if this will affect my credit?
> 
> I have perfect credit and I don't want it to be lowered over something silly like this.


If you are just getting an invoice from UPS, it shouldn't affect your credit.

If it has been awhile, and the invoice is from a credit collection agency, then UPS has already assigned the debt as a bad debt, and may have notified the credit rating agencies. Hard to say if they would bother for a few dollars.

Always better to pay and dispute the bill later.


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## carverman (Nov 8, 2010)

sags said:


> If you are just getting an invoice from UPS, it shouldn't affect your credit.
> 
> If it has been awhile, and the invoice is from a credit collection agency, then UPS has already assigned the debt as a bad debt, and may have notified the credit rating agencies.
> Hard to say if they would bother for a few dollars


I dunno about that...

If the taxes owed are assigned by UPS to a collection agency,
then I would expect that his outstanding debt, (so many months
in arrears now), *could be* on his credit history record, especially
if he is getting noticed "past due, pay up now or else" threatening letters.

However, the phone call answers he is getting from UPS is a bit confusing. 

*Who actually did the excise tax calculation on the imported
50 grams of tobacco* UPS or CRA excise branch?

Thats only about 1.76 ounces of tobacco, a fair cry from the
200 grams one is allowed to import for personal use,
and certainly to me the excise tax calculated on that seems a bit excessive.

Did UPS send in the import forms to the Federal gov't , and they finally got
around to examining them to calculate the excise tax on 50 grams of
tobacco? Or did some "accountant" in UPS customs clearance/excise calculate the value of the excise tax using incorrect data? 

If the value of the excise tax was *calculated incorrectly(got skewed) by UPS*, 
and he pays up, he is out of pocket on any excess money paid,
not rightfully owed to the Federal gov't excise branch.(ie: he gets screwed).

More than likely, in that case, UPS will just keep it because they don't
have a clue of what the correct amount should be. Only when the final accounting between them and the Federal gov't takes place on their fiscal balance sheet for imported tobacco, someone may actually figure out the
correct amount..or maybe not. 

If the value was calculated by the Federal gov't excise branch, then more
than likely that is the "tax penalty" he will have to pay for importing tobacco
in the first place. 

read this..
http://www.creditcardreview.ca/does-paying-collection-agency-improve-your-credit-score--article/

KaeJS..between your experiences at Taco Hell and importing tobacco,
you raise some interesting "fodder" to discuss here.


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## Homerhomer (Oct 18, 2010)

KaeJS said:


> I guess I don't have a choice.
> 
> No more importing tobacco for me.
> 
> Will call them and make payment arrangements tomorrow.


Call them and ***** about their fees, if it's taxes there is nothing they will do, but they can cancel their brokerage fees.

I was in a similar situation once, the call it a one time fee forgiveness or something like that.

I learnt my lesson not to do it again.


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## Homerhomer (Oct 18, 2010)

the-royal-mail said:


> Never order stuff from the US using UPS shipment. .


True for the most part, however some US businesses have realized that it's worth to cater to Canadian customers and they charge everything upfront when using UPS or other shippers (hst, duty, brokerage fees and what not), this way you see right away if it's worth buying and there is no surprises afterwards.


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## MoneyGal (Apr 24, 2009)

carverman said:


> Thats only about 1.76 ounces of tobacco, a fair cry from the
> 200 grams one is allowed to import for personal use,
> and certainly to me the excise tax calculated on that seems a bit excessive.


You are allowed to bring across the border 200 grams of tobacco for personal use when you are accompanying those goods as they cross the border.

You are not allowed to "import" any quantity of tobacco without paying excise taxes.


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## RedRose (Aug 2, 2011)

A lawyer friend just went over the border to pick up some goods that he had ordered to his post office box and got his Winter tires put on. When he came thru customs he declared everything including the tires and they dung him with a whopping tax bill. They were so officious with him, he paid but will be taking it up as he feels they should not tax him on the tires change.
Interesting thread and hard lessons here.


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## rookie (Mar 19, 2010)

first of all, try to avoid anything to do with the scam company called UPS. 

regarding credit score/history being dinged, i doubt if they will hand over ur a/c to collections for 50$


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## m3s (Apr 3, 2010)

What people don't realize is that if you pay a little extra for UPS Expedited, you don't get any of these fees. It's an ingenious scam on UPS's part and I suppose Cdn's can do little about it. They must be making a killing on brokerage fees though, it makes the deal far more expensive than paying retail in Canada

I always ship USPS unless it's a huge package then I ship UPS Expedited. I've never been charged at the door for either


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## KaeJS (Sep 28, 2010)

I called them and told them I would agree to pay the $66.83 if they guaranteed my credit would not be affected and it was rectified immediately.

They agreed, I paid.

Lesson Learned.


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## andrewf (Mar 1, 2010)

Given your previous experience with them, you might want to check your credit report to verify.


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## HaroldCrump (Jun 10, 2009)

KaeJS said:


> I called them and told them I would agree to pay the $66.83 if they guaranteed my credit would not be affected and it was rectified immediately.
> 
> They agreed, I paid.
> 
> Lesson Learned.


Who is _they_ - UPS or the collection agency?
From your first post it sounded like UPS may have sold the unpaid bill to a collection agency that is now coming after you for a smaller amount.
Who did you settle with?


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## carverman (Nov 8, 2010)

MoneyGal said:


> You are allowed to bring across the border 200 grams of tobacco for personal use when you are accompanying those goods as they cross the border.
> 
> You are not allowed to "import" any quantity of tobacco without paying excise taxes.


M.G. What I was trying to say in a previous post, (and perhaps it
didn't come across that way), is that you only can import
200 grams of tobacco, a box of cigars or a carton of cigarettes free of duty and excise and other taxes, PROVIDED you have stayed in the US for at least 48 hrs or longer, and importing them with you in person as you re-enter Canada for your personal use.

However, IF you are a non-smoker, and a friend or relative asks you to bring back some tobacco product for their personal use, you can still do
that (unofficially of course), as long as it qualifies for your personal exemption travelling and staying in the US. The border guards don't
ask if you are a non-smoker, at least not yet. 

You are starting to sound, like you used to work as a border guard at
CBSA?....I never implied that the importer of tobacco products was exempt from ANY taxes (or excise taxes)..sheesh! 

(However, having said that... and now smoothing my ruffled feathers..
my XX00 (hugs and kisses) still bestowed on M.G.)


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## carverman (Nov 8, 2010)

RedRose said:


> A lawyer friend just went over the border to pick up some goods that he had ordered to his post office box and got his Winter tires put on. When he came thru customs he declared everything including the tires and they dung him with a whopping tax bill. They were so officious with him, *he paid but will be taking it up as he feels they should not tax him on the tires change.*Interesting thread and hard lessons here.


I'm glad he did that, otherwise if they suspected he went over to do any
kind of "repairs" to his vehicle and he didn't declare the tires or any
substituted parts, by rights, they CAN (but not necessarily) seize and
impound your vehicle as a conveyance of smuggled goods. However
in most cases, you will either have to leave the tires with them or
pay a HEFTY fine on the spot to get home. 

If that was the case, to get your vehicle back out of impound..it would cost you a LOT more than the few bucks you tried to save on those tires by buying them in the US and trying to sneak them back on the car.

They can pull you over ANYTIME for a random check, you just don't know
when they will do that..ie: every 10th vehicle if they wish to follow the rules that day.

If they examine the tires and see the little rubber mold "beads" on the treads on a fresh set of tires that haven't worn off and the tires are nice and black, and you "forgot" include them in your declaration..not only are you most likely walking home from the border check point, but you better have a fat wallet to pay for all the fines they will assess against you..in some cases equivalent to the current price of you vehicle's blue book value!

If you don't pay all their required fines, they could sell your vehicle on you (at
some point) at an auction for gov't seized vehicles. They don't need your permission or signed off ownership to do that either, as the MOT will issue
new ownership papers to the buyer on a federal gov't seized asset sale. 

read this exerpt from online sources on border crossing smuggling...

*From beer and cigarettes to wedding rings*_

The smuggled goods detailed in the cards range anywhere from a couple of undeclared bottles of beer to a $16,000 engagement ring.

Other examples include an Ontario resident who attempted to declare a boat as Canadian goods when a customs officer found out it was actually being imported and a Quebec traveller who bought tires online from a business in the United States and had them installed on his car but never declared them.

The travellers occasionally gave excuses for their attempts to break the law._


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## carverman (Nov 8, 2010)

KaeJS said:


> I called them and told them I would agree to pay the $66.83 if they guaranteed my credit would not be affected and it was rectified immediately.
> 
> They agreed, I paid.
> 
> *Lesson Learned*.


Good then, it's now settled..get on with your life and never use UPS
for small shipments like that again. 

I got burned once by UPS on a motorcycle part..cost me more in brokerage fees than the part was worth. 

To add insult to injury, they tried to deliver the package twice to my home while I was away at work and left a card. I had to travel way across town to
the east end of Ottawa to finally pick it up a few days later.

I will never deal with UPS since the time I got burned by them on excess
custom clearance charges for importing that small motorcycle part, just
a chrome cosmetic doo-dad. 

Now, If I am ordering goods from the US, I arrange with the seller to ship by USPS/CP. With CP the brokerage fee is only $8. They deliver right to my door too.
I pay for the taxes and custom clearance charge by CC. I have had NO problems dealing with CP. 

If the US online store doesn't want to ship by USPS/CP and only prefer to ship UPS..I won't order anything from them. I usally find some other online business that will ship to me by USPS, most will, some won't.


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## KaeJS (Sep 28, 2010)

HaroldCrump said:


> Who is _they_ - UPS or the collection agency?
> From your first post it sounded like UPS may have sold the unpaid bill to a collection agency that is now coming after you for a smaller amount.
> Who did you settle with?


RMS - Receivable Management Services


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## the-royal-mail (Dec 11, 2009)

How long has this been going on for?


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## MoneyGal (Apr 24, 2009)

carverman said:


> (However, having said that... and now smoothing my ruffled feathers..my XX00 (hugs and kisses) still bestowed on M.G.)


(Entirely platonic) hugs and kisses from Chicago.


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## humble_pie (Jun 7, 2009)

MG while you're in the Windy City are you picking up any cross-currents, tiny zephyrs, cries or whispers about how they'll support (or oppose) obama in his home town in the next election ?


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## MoneyGal (Apr 24, 2009)

I'm with several hundred people today and I'm going to ask - it's one of the things I'm hoping to talk to people about. I'll let you know what whispers I uncover!


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