John Cletheroe's
USA and Canada Holiday Hints

Sales Taxes in the USA and Canada

USA and Canada

All prices quoted in shops, restaurants, motels, etc. in the USA and Canada, exclude sales tax (or in Canada, GST/PST/HST), except:

Petrol prices always include all applicable taxes.
No sales tax is charged on entrance charges to National Parks, National Monuments, State Parks, Provincial Parks, etc (or perhaps where relevant the tax is included in the stated charge).
No sales tax is charged on road tolls, road bridge tolls or road tunnel tolls (or perhaps where relevant the tax is included in the stated charge). However, taxes are added to ferry charges.
Prices quoted on coin operated vending machines and in coin laundries, etc, include sales tax.
No sales tax is added to the price of postage stamps.

Prices quoted in motel chain directories always exclude sales tax.

You also have to pay sales tax on car rental charges unless you have a pre-paid voucher which includes this cost. Most pre-paid car rental vouchers do not include sales tax, in which case you have to pay the sales tax on the full value of the rental (not what you paid for the voucher) at the car rental company's office, together with any other locally applied costs such as CDW/LDW (and of course, the tax on those elements). Some airports also impose a usage fee on car rentals.

USA Only

In the USA the state sales tax rate varies from state to state and there are frequently local county and city sales taxes in addition to the state sales tax, for example a local lodging tax. Some items are tax free. Some items attract different rates of sales tax. I think that sometimes visitors from another state do not pay sales tax on some items but this doesn't seem to apply to visitors from abroad.

US State Sales Tax Rates In Some States (Mainly Western States)

California	7.25%
Idaho	5%
Montana	0%
Oregon	0%
Pennsylvania	Mainly 6% but 7% in Allegheny County and Philadelphia County
Washington State	5%
Wyoming	4%

Additional local taxes may also apply.

Although not a tax, it is probably worth mentioning here that CDW (Collision Damage Waiver on car rentals) is much lower in California than in other states.

Canada Only

In most parts of Canada there is a Provincial Sales Tax (PST) and also the federal Goods and Services Tax (GST) which is similar to VAT.

GST is levied at a rate of 7% wherever it applies.

PST applies in British Columbia (7%), Manitoba (7%), Ontario (8%), Prince Edward Island (10%), the Province of Québec (7.5%) and Saskatchewan (7%).

There is no PST (or the rate is currently 0%) in Alberta, Northwest Territories and Yukon.

In New Brunswick, Newfoundland and Labrador, and Nova Scotia HST (Harmonised Sales Tax) applies. This combines GST and PST and is levied at 15%.

All rates are as at early 1998.

In the Province of Québec GST is called TPS and PST is called TVQ. These are the initials of the words in the French translations of the English names.

Georges Guilleminot kindly sent me the following comment:

Just a note to inform you that the Québec sales tax is more like 8% because of the way they charge it. The tax is actually counted after the federal GST has been added to the bill. For a $100 purchase a merchant will add $7 for GST thus amounting to a total of $107. Only after the addition has been made will the Québec sales tax be added. So 7.5% on top of $107 bill will come to $115.03.

Yes, the Québec government actually charges tax on tax. This way they receive 8.025% tax of the value of the initial purchase while claiming a charge of only 7.5%. Pretty sneaky don't you think?

Visitors to Canada can obtain a refund for GST/PST/HST paid for some purchases.

External Links

Federation of Tax Administrators - This site includes a useful list of current sales tax rates in each American state. Checked Mar-98.

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Most recently modified 29-Dec-05