subject: Home Depot And The Pst [print this page] Every time I see or hear of a Canadian tax-related story, I think I make the same face. It's the face that consists of a lifted brow and a semi-surprised look while I skim through the paragraphs. I quit reading the details years ago because, well, it always ends the same way with Canadians being taxed more, on something, for some reason. This story, however, kept my attention word-for-word. This time I wore a smirk instead of the traditional brow life. It appears that Home Depot is unclear on our Canadian PST rules.
It seems that the Home Depot, specifically the British Columbia locations, have been overcharging customers for the last year and a half by implementing PST on PST-exempt items. In case you're wondering what it is that has remained PST-exempt, there are two large categories, one being safety equipment and the other being any products that make a residential home more energy efficient. Don't get too excited. Even this ends on July 1 of 2010. So until then, individual items such as insulation, smoke detectors, fire extinguishers, caulking (to keep the heat in), weather stripping and Energy Star certified windows and doors, to name a few, are items that Home Depot has been charging PST on for the past year and a half. This may not sound like a big deal but if you do the math, it shows a different story.
Home Depot currently has 179 stores operating in Canada. Their 2009 reported sales were around the $6.8 billion mark, which averages out to approximately $38 million per store. Out of the 179 Canadian locations, 25 of these happen to be in British Columbia, which means the B.C. locations accounted for approximately $1 billion in sales in 2009. An accountant estimated that if only five percent of Home Depots sales for 2009 involved PST-exempt items, the estimated numbers would mean that customers were overcharged $3.3 million in taxes.
So, where did all the money go, you ask? To the B.C. government, of course. Tiziana Baccega, Home Depot's public relations manager, says, "The mistake stems from a nationwide change made to the company's inventory and computer checkout system." She claims that the PST exempt items were programmed into the system but, for unexplained reasons, the tax was not removed at the till. She also notes "The Home Depot in no way benefited from this error, as all PST collected has been remitted to the B.C. government."
"It seems like Home Depot has acted like a little tax agency for the government," said Maureen Bader, B.C. spokeswoman for the Canadian Taxpayers Federation. B.C.'s finance minister released a statement that said, "Any taxpayer who has overpaid the PST in the amount of $10 or more may apply to the Ministry of Finance for the refund, within four years from the date of purchase."
