# Does NAFTA exempt you from duty if you buy a guitar from the US?



## Samsquantch (Mar 5, 2009)

I was under the impression that if you purchase a guitar from the States, you are exempt from paying taxes at the border if it was made in North America...True? If not, is there any other way around it? I see guitars on TGP and Ebay all the time that I'd love to snag, but its not worth the trouble if I have to pay hundreds extra in taxes in addition to shipping charges.


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## kw_guitarguy (Apr 29, 2008)

You will pretty much always have to pay at least GST... what NAFTA exempts you from is any additional duty. But you usually have to prove it was made in North America...

So just remember that Duty and Taxes are two different things..

~Andrew


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## 2manyGuitars (Jul 6, 2009)

GST _and_ PST in Ontario.

I did a straight trade with a guy in Utah. My amp for his guitar.
When UPS showed up, I had to pull out the plastic and fork over almost $450 for something I paid ZERO dollars for.

The canadian government sucks in that respect.


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## bcmatt (Aug 25, 2007)

It should also be noted that the third surprising charge that you can get is "brokerage fees".

GST is no big deal. You can often be exempt from Duty. You expect to pay shipping. HOWEVER, if you ship with UPS or Fedex, you can expect to pay a hefty sum for brokerage fees. The cheapest method is to make sure that someone is sending via regular USPS and Canada post, because then you just pay about 5 dollars plus the GST. (or maybe it is a percentage of the cost of the item).
So, stay away from UPS and such couriers AT ALL COSTS!

You are actually better off either spending an extended holiday down in the states and bringing something back within your alotted limit, or just buy in Canada. L&M will actually match any price to your door, even from the States. (99% of the time the L&M price will work out to cheaper anyways) L&M uses this site, and you can to to figure out costs:
http://thefinalcost.com/


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## Stonesy (Oct 7, 2008)

I think you get hit for 13% at custom on the DECLARED value. For example:
I bought a $2500 US guitar of of TGP and paid about $75 duty/tax.
I bought another $2500 US guitar from a vendor and paid $300+.
The one from TGP was shipped USPS which has a maximum liability for $600, so I think the guy just declared it at around that much.
The second guitar was by a US carrier to Canada Post and was insured for the full price so I had to pay on that amount. Smaller packages sometimes get hit for $$ and sometimes don't, so don't take this as gospel.


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## Samsquantch (Mar 5, 2009)

Stonesy said:


> I think you get hit for 13% at custom on the DECLARED value. For example:
> I bought a $2500 US guitar of of TGP and paid about $75 duty/tax.
> I bought another $2500 US guitar from a vendor and paid $300+.
> The one from TGP was shipped USPS which has a maximum liability for $600, so I think the guy just declared it at around that much.
> The second guitar was by a US carrier to Canada Post and was insured for the full price so I had to pay on that amount. Smaller packages sometimes get hit for $$ and sometimes don't, so don't take this as gospel.


I ordered a new pedal from Tonefactor and upon receiving it, I noticed on the package that the declared value was $20, significantly less than what I paid. American TGP'ers seem to get pretty offended when Canadians ask them to declare a lower value.


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## Powdered Toast Man (Apr 6, 2006)

2manyGuitars said:


> GST _and_ PST in Ontario.
> 
> I did a straight trade with a guy in Utah. My amp for his guitar.
> When UPS showed up, I had to pull out the plastic and fork over almost $450 for something I paid ZERO dollars for.
> ...


That could not have been all taxes. UPS hit me with some INSANE brokerage fees. $82 for a $200 item. Only about $10 of that was actual taxes. NEVER EVER ship UPS or Fedex across the border.


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## Powdered Toast Man (Apr 6, 2006)

Duty depends where the instrument was actually made. If it is manufactured in one of the NAFTA countries (Canada, USA, Mexico) you do not pay duty. You are however subject to sales tax. GST for sure and PST depending on the province you are entering at. 

If the instrument was manufactured overseas - say one of the Southeast Asia countries - then you almost certainly will be subject to duty as well as taxes.


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## Jaggery (Mar 12, 2006)

2manyGuitars said:


> GST _and_ PST in Ontario.
> 
> I did a straight trade with a guy in Utah. My amp for his guitar.
> When UPS showed up, I had to pull out the plastic and fork over almost $450 for something I paid ZERO dollars for.
> ...


Unbelievable!

Free money for the govt.

I am all for higher taxes and such to pay for services, but this is just ridiculous.

However if I am right, You can appeal.

I know, When USPS delivers, they have the Canadian customs forms in multiples. At the back are options for if you dispute charges.


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## pckpat (Aug 19, 2009)

if you have a "friend" in the states that you deal with on a semi-regular basis,it's possible to exchange items as gifts,which are exempt from duty.say for example,i know another tube collector in calif.and we choose to leave cash out of the equation,and just swap a set of tubes.there is a box on the usps green sticker to mark as such.i've been hit before on the brokerage fees on an item from musicians friend.the ups guy told me if they send it expedited(for very little extra cost)the brokerage fees will be avoided.


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## Robert1950 (Jan 21, 2006)

NAFTA (MIM or MIA) no duty. GST/PST or HST. Shipped by USPS, brokerage fee $5.00. Shipped by UPS or FedEX, brokerage fee = an arm and a leg or a kidney and a litre of blood.


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## Robert1950 (Jan 21, 2006)

But, if you buy a guitar MIJ from the US, you pay 6% duty on top.


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## theelectic (Mar 11, 2006)

The reason UPS brokerage charges are so high with their cheaper shipping services is because with those services, there is no broker specified. With the more expensive services (Expedited, Worldwide Express, etc.) UPS is automatically contracted as your broker. If you don't specify a broker, UPS will use themselves, and that's where they charge an arm and a leg. It's all relative of course; they don't differentiate between small/big or cheap/expensive, I imported $7000 worth of computer equipment last year and brokerage was $90, a little over 1% so I didn't care really.

The trick is if you live near the border, you can act as your own broker - it just involves looking up certain codes and filling in some paperwork, and some driving to/from a warehouse. There's a website that details the process pretty clearly, which I can't find at the moment, but it's an option. 

On the topic of people not willing to declare a lower value, for one, it's lying (and I know there are a lot of xian ultra conservative types on other boards), two if you declare something for $20 there's no way you can get insured for $500 if it's actually worth that much so there goes your CYA. In my experience though insurance with USPS isn't worth a damn if the item is damaged, and even less if it's lost so I don't particularly care.

I will say though contrary to last year, when the dollar started shooting up, customs delivery across the border has been very quick, and they've been letting a lot more stuff through. I just received $200 worth of fully declared, commercially invoiced guitar parts a couple of weeks ago dropped right in my mailbox with no extra charges whatsoever. I've been importing long enough to know it's a total crapshoot, but I'm always prepared to pay full taxes and factor that into my purchase decision.


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## fatherjacques (Sep 17, 2006)

2manyGuitars said:


> GST _and_ PST in Ontario.
> 
> I did a straight trade with a guy in Utah. My amp for his guitar.
> When UPS showed up, I had to pull out the plastic and fork over almost $450 for something I paid ZERO dollars for.
> ...


If it was a straight trade and you can prove you paid taxes on the item you traded (Yours) you should not have paid taxes . The seller should ahve issued an invoice (Commercial invoice ) showing it. The insurance value is an other thing. The net amount paid fr tax purposes should Havee benn 0$. It would take a lot of work but ultimely you could be reimbursed.

In a sense when you pay taxes they are the same taxes you pay in a Canadian retailer. In that case you the government through the carrier instead of the retailer.


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## cheezyridr (Jun 8, 2009)

what ever you do, 

DO NOT SHIP BY UPS!!!!

i bought a recumbent bike from a guy in the states. i paid just under $300 in taxes and brokerage fees for the bike. ups separated the other box containing the wheels, even though they were marked 1 of 2, and 2 of 2, they tried to collect those fees from me twice. when i refused to pay them or give them the wheels, they threatened to have me arrested. after it was cleared up, i still continued to recieve bills for the extra fees for quite a long time, and had to continuously play phone tag trying to straighten out the same problem. over and over and over again.

i won't get into the whole thing of avoiding the tax, because some people get offended. but, it can be done, and i for one, won't be paying them.


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## smorgdonkey (Jun 23, 2008)

2manyGuitars said:


> GST _and_ PST in Ontario.
> 
> I did a straight trade with a guy in Utah. My amp for his guitar.
> When UPS showed up, I had to pull out the plastic and fork over almost $450 for something I paid ZERO dollars for.
> ...


Here's the deal...UPS charges brokerage fees which you can argue about but not likely win that argument. They 'provide brokerage' and you pay for it. 

The taxes...well, I don't know if you would have paid any if you would have used United States Postal Service and the documents showed that it was not a 'purchased item'. Regardless, because it is tax you can dispute it.


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## torndownunit (May 14, 2006)

Samsquantch said:


> I ordered a new pedal from Tonefactor and upon receiving it, I noticed on the package that the declared value was $20, significantly less than what I paid. American TGP'ers seem to get pretty offended when Canadians ask them to declare a lower value.


Because if they can get in trouble for doing this if they get caught. Especially if they are a business. Or they just plain don't want to do it because they don't like lying. You can always ask, but don't be surprised if they don't want to do it. Plus, while it might save you some $'s on taxes, if for some unlucky reason the item is damaged or lost you are screwed. Or the seller is screwed if they decide to remedy the situation. There are plenty of reasons for a seller not to want to lie about the declared value on an item.

It's been mentioned, but the golden rule is to just not use the couriers unless it's an absolute last resort. If a seller won't ship USPS, I look elsewhere for one that does.



> I've been importing long enough to know it's a total crapshoot, but I'm always prepared to pay full taxes and factor that into my purchase decision.


Exactly. I use USPS, so I factor in taxes and duty. Using USPS I'd say over 50% of my shipments over the last 10 years have been delivered without taxes or duty owing. So the 'worst case scenario' is I will have to pay tax and duty. If the item is still a deal (or just something I can't get here) then I get it. If it's not I don't.


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## EGBDF (Jul 12, 2009)

Powdered Toast Man said:


> That could not have been all taxes. UPS hit me with some INSANE brokerage fees. $82 for a $200 item. Only about $10 of that was actual taxes. *NEVER EVER ship UPS or Fedex across the border*.


Couldn't agree or stress this ANY MORE!!
As would anyone who's learned this the hard way...


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## Lincoln (Jun 2, 2008)

I've always had good luck driving back across the border. My woman & I cross a few times a year for some serious power-shopping, always come back after 2 to 3 days anywhere from $3000 to $5000 over limit and we've never paid more than $65 in duty/taxes. This last trip we paid a whole $15.65 on our normal $3000 + overload of goodies. At least here in the west anyway, the canadian border people really work to find the lowest possible payable amount for you. Just don't lie, have your reciepts and a summery ready, don't go over on booze & smokes and it's all good. 

As far as mail order goes.....yeah never do UPS, always choose USPS.


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## puckhead (Sep 8, 2008)

I have mentioned this is a few other threads, but 90+% of all Canadians live with 100 miles of the border. So for a lot of us, it's even closer, and very convenient to go across and pick the item up.

Out in Vancouver, I use a shipping address in Point Roberts (The Letter Carrier), that charges about $2 per item. There must be similar postal outlets in other border towns, it's really worth while looking into. US sellers prefer shipping to a US address (take advantage of free shipping offers, or US-only items on Musiciansfriend, for example), and it's an hour out of my day to go pick it up. My wife or I usually go down across the line to pick something up once or twice a month. I deal with the GST/PST on my own, no brokerage fees or holdbacks. no fuss, no muss.


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## zontar (Oct 25, 2007)

I think I mentioned this before, but I once bought a set of tapes at a conference in Canada. After getting home & listening to the tapes I discovered that it was the wrong set, and in fact a couple of the tapes didn't work.

I called their toll free number & they said to keep the tapes I bought and they would send me the correct ones--great I thought--but when they arrived (Sent USPS), I was charged duty for something I already had paid for IN CANADA.

The post office did give me forms I could use to get compensated as I asked about the duty when I picked them up.

Still it was a hassle to go through.

I'm glad when Stash picks sent me some free samples I didn't have to pay duty on them. (I had emailed them after buying some of their picks--they sent me some free samples and asked me to try them out & let them know what I thought.) 

None of this is as excessive as examples given here--but it makes me wary of ordering from outside of Canada.


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## Jaggery (Mar 12, 2006)

puckhead said:


> I have mentioned this is a few other threads, but 90+% of all Canadians live with 100 miles of the border. So for a lot of us, it's even closer, and very convenient to go across and pick the item up.
> 
> Out in Vancouver, I use a shipping address in Point Roberts (The Letter Carrier), that charges about $2 per item. There must be similar postal outlets in other border towns, it's really worth while looking into. US sellers prefer shipping to a US address (take advantage of free shipping offers, or US-only items on Musiciansfriend, for example), and it's an hour out of my day to go pick it up. My wife or I usually go down across the line to pick something up once or twice a month. I deal with the GST/PST on my own, no brokerage fees or holdbacks. no fuss, no muss.


What do you mean you deal with GST/PST on your own?

When you cross back into Canada, dont they ask you what you are bringing and if you tell them its a guitar/amp etc..., 
wouldnt they ask you to pay the charges first before taking it in?

On a separate note, what if I buy a guitar (used/new) and try to bring it back into canada as "already owned in Canada" 
and took it for a ride to USA?


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## megadan (Feb 5, 2006)

Powdered Toast Man said:


> Duty depends where the instrument was actually made. If it is manufactured in one of the NAFTA countries (Canada, USA, Mexico) you do not pay duty. You are however subject to sales tax. GST for sure and PST depending on the province you are entering at.
> 
> If the instrument was manufactured overseas - say one of the Southeast Asia countries - then you almost certainly will be subject to duty as well as taxes.


Correct.


NAFTA exempts you if the guitar is MADE in the USA, not sent from the USA.


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## Jaggery (Mar 12, 2006)

megadan said:


> Correct.
> 
> 
> NAFTA exempts you if the guitar is MADE in the USA, not sent from the USA.


Thats the thing, How many time will the duty be levied on the instrument?

Once already in North America, Someone alreay paid duty.
Then he sells it to someone in Canada and then that guy sells it to someone in USA...so on....


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## Guest (Sep 2, 2009)

*nafta*

nafta needs to be dismantled


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## Steadfastly (Nov 14, 2008)

Duty and taxes are similar but not the same thing. Almost everything is duty free now. Very little is tax free though.


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## benjoue (Mar 8, 2013)

Very interesting post. Courier company (UPS, FedEx, DHL...) will charge you big bucks because you don't have the choice to use them as a personal importer. GST and provincial taxes are billable on *all imports*. This means that if you do a trade at 0$, you will end up paying taxes on your amp. NAFTA only prevent paying duties on North American merchandise. You can ask shipper to do an invoice with a lower value (this might be a problem if you claim inssurance), to mention No commercial value, exchange. When shipped through USPS duties and taxes will be charged or not.


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## benjoue (Mar 8, 2013)

I agree with you. That is the bad side of the NAFTA. Since the Free Trade Agreement includes 3 countries, taxes are being collected every time the good cross the borders.


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## Krelf (Jul 3, 2012)

The big couriers are geared to dealing with corporations who utilize professional customs brokers. The reason for this manner of operating is that their goods are not subjected to lengthy delays by indepth customs inspections as they are released by the entire load rather than parcel-by-parcel. (This was through an old agreement with the federal government) The price for this service is that the items are rated by a broker immediately after being dispatched and you pay for it. Most companies opt to have their own brokers clear their items. The courier's broker is a costly default service for those who fail to specify a broker.

But individuals have a privilege if they ship by mail. Our personal items are rated by border services personnel, and without brokerage services, other than the small processing fee. That's why postal shipments are more sensible for the individual. The items go to border services, get rated and if the officer chooses not to charge GST/HST the item is released and is delivered to your door. In some cases they seem to escape scrutiny completely, as Canada Post often mis-sorts them with local mail!


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## GuitarsCanada (Dec 30, 2005)

Its a very bizarre process to say the least. There are rules and regulations but nobody seems to follow them. I have been shipping and receiving gear as well as other goods across the borders for years and it is always different. I just ordered $600 worth of goods from China for our shop and it came with zero charges from FedEx. Others times I might get a tax charge or possibly an import charge or brokerage fee. I have ordered $20 worth of stuff from the states and gotten brokerage charges. I remember ordering a $40 item for my daughter one time and it came with a $26 brokerage charge from UPS. 

The funniest thing to me is that I can order say a camera lens from Hong Kong and it will show up here in 4 days with no charges. Order the same thing from Buffalo NY and it takes 2 weeks to get here and it comes with $100 in charges. There is no telling what will happen.


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## Jim DaddyO (Mar 20, 2009)

Well, if you are going across the boarder to buy a guitar, getting the case a bit dusty and not saying anything coming back would be my route......"Of course I always travel with my guitar officer!"


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## Krelf (Jul 3, 2012)

Just be advised that undervaluing, misdescribing or smuggling items into Canada are technically criminal offences under the Customs Act. Consequences vary based on the officer, value and circumstances. They can lead to seizure of the item or even criminal charges. If it's corporate, a search warrant may be executed on the company's premises and maybe even the principle's house if there is any evidence (s)he takes documents home. They usually assume in corporate cases that the offences are continual.

A perpetrator will also be targeted each time (s)he crosses the border as a previous violator. Its a better policy to be honest in your border-based dealings, even when dealing with customs matters indirectly through the mail.


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## loudtubeamps (Feb 2, 2012)

Let's ask GOOGLE! Rules of Origin: The North American Free Trade Agreement (NAFTA)
If I need a definitive answer to a specific question, I try and go to the source first.Usually the answer is readily found.
Cheers, d


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