EB Games not charging GST/PST on games purchased with credit.

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AgtGibb

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Any idea how EB Games gets away with this? It's a good angle to play if you are trading in and want to save some tax on big purchases.

Is this legal? Do they just swallow the tax? With 2000+ stores world wide, this seems like ALOT of money to absorb.

I noticed BlockBuster does this also. Is this common practice?

Thanks for any information.
 
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You don't charge them sales tax when you trade in stuff and they don't charge you sales tax when you buy stuff with that credit. It all balances out. Most states' tax codes specifically set forth that tax isn't charged on bartering.
 
When you trade something in, they credit you the sales tax for the items you're trading in. When you buy something, it cancels out the sales tax you got from what you traded in.
 
Mostly they don't charge you tax because it's a change of possession items, not a sale. When you use credit, its as if your just trading straight across with no monetary value, thus no need for tax.
 
Is there a way to beat the system here?

IE since EB uses the same cards for trade-in credit and gift cards, would they charge tax on purchases made with gift cards?
 
[quote name='jimmycanuck']Is there a way to beat the system here?

IE since EB uses the same cards for trade-in credit and gift cards, would they charge tax on purchases made with gift cards?[/QUOTE]

Nope their system tracks it and differentiates between the 2. FYI don't buy a gift card with your store credit cause you'll lose the tax-free.
 
And for the record, I've done a lot of trading in at EB, and they never have charged tax on credit. It's safe to say that this is a permanent thing.
 
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