Canadian (Ontario) tobacco taxes: how much it costs (official reply from govt)


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Ok, according to the Canadian federal site, I had previously thought that the tax was the price of cigars + 22% (which would be 122%).

Here is how tax is calculated in ONTARIO. (I had forgot that it's different for each province and that both federal AND provincial taxes had to be calculated).

I asked how much tax I would have to pay on $100 worth of cigars. Here's the reply I received:

Thank you for contacting the Ministry of Finance.

You have asked about bringing a box of cigars costing $100 US from the United States into Ontario and how much tax/duty would be charged.

Every Ontario resident and every person carrying on business in Ontario who brings into Ontario or receives delivery in Ontario of tobacco (other than tobacco in bulk) acquired for personal consumption or for the consumption of others, must report the importation immediately to the Minister of Finance, supply all invoices and pay the same tax as if the product had been purchased in Ontario.

The current Ontario tobacco tax rate on a cigar is 56.6% of the taxable price of that cigar.

Generally, the taxable price of a cigar, in this instance, is the price for which the cigar was purchased, by the consumer, inclusive of all consideration given by the consumer for the cigar as well as federal excise tax, federal duty (but excluding GST) and all costs and charges relating to mailing, delivery and transportation.

Specifically, the taxable price of a cigar, in this instance, is the sum of the following:

1. The price for which the cigar was purchased by the consumer including the value in terms of Canadian money of any other consideration accepted as or on account of the price of the cigar by the retail dealer of the cigar.

2. The cost of, or charges for, customs and mailing, delivery or transportation, whether or not they are shown separately in the books of the retail dealer or on any invoice or in the computation of the price, or whether or not title has passed to the consumer before delivery to the consumer.

3. The amount of the tax imposed under the Excise Tax Act (Canada), other than the tax imposed by Part IX of that Act, or the duty imposed under the Excise Act (Canada) in respect of the cigar or in respect of the sale or acquisition of the cigar.

We recommend contacting Canada Revenue Agency directly to enquire about their rates of taxes/duty under their legislation. Their website is www.ccra-adrc.gc.ca.

If you require additional assistance, please contact the Ministry of Finance, Client Accounts and Services Branch at 1-866-ONT-TAXS (1-866-668-8297).

So... I'm still unsure. I was hoping to have a DOLLAR AMOUNT given to me. But I never knew that even SHIPPING WAS TAXED. (holy crap I knew our taxes were brutal but even *I* didn't know they were THAT brutal!)

So on a $100 order that cost say $30 for mailing, according to the FEDERAL site that would be $100 * 122% in FEDERAL tax = $122 in federal tax.

Then the provincial tax of 56.6 would be on the $100 product + $30 shipping + $122 federal tax = $252 * 56.6% = $142.63 in provincial tax.

Grand total of taxes paid = federal tax + provincial tax = $122 + $142.63 = $264.63

Grand total of buying a $100 box of cigars outside Canada that cost $30 to ship? : $100 + $30 + $122 fed tax + $142.63 Ontario tax = $394.63

'gotta love that tax-on-tax BS.

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I suppose they actually expect you to pay sales tax (GST, right?) on all of your internet orders, too?

There are many things I simply refuse to voluntarily communicate to our central gov't. It's a need-to-know basis and I don't feel they need to know. :)

Cheers,

~ Greg ~

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Thats how the taxes workout today. Next week, next month, next year there will be some more mumbo jumbo. Honestly believe they screw around with these taxes however they choose. What can you do...**TAX PAIN** :bsmeter:

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Was a small part of you expecting a reply similar to:

'Thankyou for your email, the amount would be $394.00'

lol these people sure do love to write a lot! :covereyes:

And then you woke up from the dream (nightmare!)

Tax to be paid on tax is a horrendous thought!

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Did you not double dip there? You say the Federal tax was The price of the cigars (100%) + 22%. I think wholesale purchase price BY ITS RETAIL DEALER is the TAXABLE price (GST/HST or whatever) + 22% of the amount.(no 100%) Plus shipping if applicable, then 56.6%.

That dealer then adds the 100% (or more!) mark up :thumbsdwn:

Lisa

Taxable price of a cigar defined:

taxable price = the price for which the cigar was purchased by its retail dealer + a prescribed percentage (currently 22%) of that amount; or

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I suppose they actually expect you to pay sales tax (GST, right?) on all of your internet orders, too?

Actually it's HST now. GST was originally a 'temporary' tax, Canada-wide, that was implemented to pay down the debt. Of course they never got rid of it. For years we had GST (fed tax) + GST (provincial tax) on our purchases. GST was around for such a long time without the fed govt getting rid of it they finally said "Screw it - we're combining the 2 taxes into 1 tax to save money on the system". hence, HST was born.

So to all of you non-Canadians out there: any time one of your governments says they're going to implement a 'temporary tax' to help pay for something or other, call them out on their BS and give Canada's HST as a prime example.

There are many things I simply refuse to voluntarily communicate to our central gov't. It's a need-to-know basis and I don't feel they need to know. :)

Hehe, yes but your govt has been busy since 9/11 passing bill after bill making them legally able to just look up anything and everything about any citizen. :) Although I'm sure Canada will soon be in the same boat. They're already in the process of passing a bill similar to what's already in place in the US that will allow them to monitor people's internet activities without warrant.

I still love the quote: "The people used to watch over the people. Now they're watching the people."

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Did you not double dip there? You say the Federal tax was The price of the cigars (100%) + 22%. I think wholesale purchase price BY ITS RETAIL DEALER is the TAXABLE price (GST/HST or whatever) + 22% of the amount.(no 100%) Plus shipping if applicable, then 56.6%.

* Taxable price of a cigar defined:

i. taxable price = the price for which the cigar was purchased by its retail dealer + a prescribed percentage (currently 22%) of that amount; or

ii. taxable price = the price paid for the cigar by the consumer where a consumer purchases the cigar directly from the manufacturer or importer of the cigar.

----

We would all fall into part (i). So if the cigar(s) were purchased for say $20, the tax would be the price for which the cigar was purchased ($20) + 22% of that amount. ($20 + $4.40 = $24.40)

.. although I think I messed something up in my original post because I thought the federal tax algorithm I was using was from what I read on a fed. gov site. I'm looking now at the Ontario (provincial) gov site and I think that's what I was initially reading from.

It's very hard to determine since upon import, the consumer is taxed at both the federal and provincial level, and the provincial tax seems to be based on what the federal tax on the product would be.

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More here: http://www.rev.gov.on.ca/en/bulletins/tt/tob1_2001.html

Although the more I read the more confused I tend to become.

I'm going to just flat out ask someone (gov. official) to tell me what the formula is so I can plug in my own numbers each time.

I swear they've got someone blindfolded in a room throwing darts at a wall to determine half this crap.

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rape is what that is :( i think we need a cigar rights of canada

yes we do...if you start it...i will be the first to join.

darksky

hows this for temporary...in canada...income tax is "temporary"...insomuch as it was first levied "temporarily" to help pay off war debts incured from WWI.

derrek

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yes we do...if you start it...i will be the first to join.

darksky

hows this for temporary...in canada...income tax is "temporary"...insomuch as it was first levied "temporarily" to help pay off war debts incured from WWI.

derrek

They're pros at what they do. If they want more money, first they have to create a problem, then create a temporary tax for that problem. Then be sure the problem exists for a length of time that will let people get used to the tax as a part of everyday life. After that, it's easy to keep it.

Ok, 'bit off topic here. :)

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