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Taxes and Vouchers Again

kb_mv
Mayor / Maire

Maybe I'm having a slow day but I am struggling to come up with a reason that vouchers are worth it if I have a credit card. I have read some other threads on this but it seems people get confused with the question and insist you are not double taxed. Maybe it's the term that is confusing. (Suppose no autopay to make it easier).

 

If I buy a $25 voucher here in NB, I pay $3.75 in tax for a total of $28.75 for $25 worth of product/service. I load it onto my PM account and I have a $25 credit available for use which cost me $28.75. When my 30 day renewal comes around I am charged the $25 loaded from the voucher plus I still owe $3.75 for the taxes PM charges for the service I receive. In this scenario I have paid $7.50 in total taxes for a total of $32.50 by the time my account is renewed on the $25 plan.

 

Now if instead of the voucher, I go in and make a manual payment using a credit card of $28.75 (Visa doesn't charge tax), when my renewal comes around PM charges me $25 for the plan plus $3.75 tax here in NB. The total I have spent to receive $25 worth of service is $28.75, not $32.50 as in the first scenario.

 

Am I explaining this properly? Does it make sense? I think when people say they have been double taxed they really mean it has unfolded like in the first example. Vouchers are not treated like a gift card, they are treated as a service and taxed accordingly at point of sale. The full value of the voucher (which does not include tax paid) is of course available to load on your PM account.

 

Hopefully I haven't muddied the waters. For me it comes down to this: if I have access to a credit card (autopay not withstanding) why would I want to go the voucher route instead?

37 REPLIES 37


@kb_mv wrote:

@Carniam I must not have explained it properly. To get $25 of available funds in my self serve account I can make a payment with Visa of $25 or buy a $25 voucher which I pay $28.75 for.


You only get taxed when you pay. You're overthinking it. Tax is only charged once.

Look at it this way. If the $25 voucher topped up your account by $25, then that $25 voucher plus taxes did it’s job.  Your account showing transactions will NEVER show taxes for your every 30 day payment. If I top up my account using a credit card for $10 my PM account will show a $10 increase of balance BUT the $10 transaction for the top up will be billed to my credit card as $11.20, $10 plus $1.20 taxes. 

 

I think this covid-19 situation can give the odd day full of brain farts.....mine was last Thursday. 

@Carniam I must not have explained it properly. To get $25 of available funds in my self serve account I can make a payment with Visa of $25 or buy a $25 voucher which I pay $28.75 for.

@gpixel I have to disagree with you. People ask on here how to get a statement showing taxes paid for their business, so taxes are paid. Have a look at my bank statement and corresponding charge for $17.25 along with the period in question from my payment history. I had $10 in rewards so owed $15. I was charged $17.25 which is the %15NB tax.

 

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Carniam
Model Citizen / Citoyen Modèle

If you are paying with available funds you do not pay additional tax. If you owed 30 and had 25 in available funds on your account they would take the 25 and charge your credit card for the remaining 5+tax. Hope that helps

Anonymous
Not applicable

Indeed. I call it being taxed on _new_ money. A voucher is new money with taxes paid at the point of sale. Manual payments are new money with taxes paid on the payment card. Any required autopay amount is taxed on the payment card as new money.

Credits and rewards in the account don't experience tax.

Recharge doesn't charge provincial taxes.

If you know people in AB then they could go to a store and pay just GST and give you the code.

gpixel
Mayor / Maire

@kb_mv no that is incorrect. you shouldn't be charged tax through your self serve account. my account never shows tax deductions. the self serve is credit based 

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