#1
Apr 16, 2024I have noticed that WestJet charges me the full HST on the full price when I use WestJet Dollars - even when I pay the complete "base fare" with WestJet Dollars.
How come? I am actually getting a discount, I do not pay that part of the ticket. Why do I have to pay sales tax on something that is free for me?
My experience with other airline's loyalty programs was that they do not charge similar sales taxes on the free part of the ticket, but that was in other countries. Is there special legislation in Canada? Would Air Canada or Porter charge HST if I used their relevant points for a reward booking?
If not: Why is WestJet different?
(For clarification: I'm not talking about other taxes and fees, just about sales tax on the non-revenue part of the base fare that is "paid" with WestJet Dollars.)
How come? I am actually getting a discount, I do not pay that part of the ticket. Why do I have to pay sales tax on something that is free for me?
My experience with other airline's loyalty programs was that they do not charge similar sales taxes on the free part of the ticket, but that was in other countries. Is there special legislation in Canada? Would Air Canada or Porter charge HST if I used their relevant points for a reward booking?
If not: Why is WestJet different?
(For clarification: I'm not talking about other taxes and fees, just about sales tax on the non-revenue part of the base fare that is "paid" with WestJet Dollars.)
#2
I am just guessing here but because your Westjet dollars account has a monetary value they must charge the HST even if the dollars you use are the ones you accumulated. In other airline programs they are points and they don't have a monetary value per se.
#3
Quote:
Actually, miles often do have a stated value, but a ridiculously small one. Like 0,01 Cent or so. :-) (Like a Pengö -> see Wikipedia for the fascinating and horrible story of that Hungarian currency)Originally Posted by Ace Cdn
I am just guessing here but because your Westjet dollars account has a monetary value they must charge the HST even if the dollars you use are the ones you accumulated. In other airline programs they are points and they don't have a monetary value per se.
The WestJet Rewards program terms say "Except as specifically provided in these terms and conditions, WestJet dollars have no cash value, and are not exchangeable for cash. WestJet dollars are not available for purchase."
While WestJet Dollars can have a value when buying tickets (if you have at least 25 of them or a WestJet credit card), the tax on this value has already been paid when these WestJet Dollars where earned. (Alternatively, WestJet could give a 1% discount right away which would result in a lower tax.)
Same is true for a lot of other voucher or points. When I eat six meals at Burger King, I get the 7th one for free. Cash value somewhere around $5-6 - and no tax will be charged on the free meal.
What if WestJet let us use the WestJet Dollars for free meals. Tax?
#4
TheGreatestX , Aug 22, 2012 11:59 pm
Isn't it the same as using Canadian Tire money?
#6
Quote:
The WestJet Rewards program terms say "Except as specifically provided in these terms and conditions, WestJet dollars have no cash value, and are not exchangeable for cash. WestJet dollars are not available for purchase."
While WestJet Dollars can have a value when buying tickets (if you have at least 25 of them or a WestJet credit card), the tax on this value has already been paid when these WestJet Dollars where earned. (Alternatively, WestJet could give a 1% discount right away which would result in a lower tax.)
Same is true for a lot of other voucher or points. When I eat six meals at Burger King, I get the 7th one for free. Cash value somewhere around $5-6 - and no tax will be charged on the free meal.
What if WestJet let us use the WestJet Dollars for free meals. Tax?
what I am saying is that in the ticketing transaction it is treating your Westjet dollars as currency similar to if you have money in you travel bank. So Sabre charges tax on that accordingly. It is the way the system is set up.Originally Posted by sokolov
Actually, miles often do have a stated value, but a ridiculously small one. Like 0,01 Cent or so. :-) (Like a Pengö -> see Wikipedia for the fascinating and horrible story of that Hungarian currency)The WestJet Rewards program terms say "Except as specifically provided in these terms and conditions, WestJet dollars have no cash value, and are not exchangeable for cash. WestJet dollars are not available for purchase."
While WestJet Dollars can have a value when buying tickets (if you have at least 25 of them or a WestJet credit card), the tax on this value has already been paid when these WestJet Dollars where earned. (Alternatively, WestJet could give a 1% discount right away which would result in a lower tax.)
Same is true for a lot of other voucher or points. When I eat six meals at Burger King, I get the 7th one for free. Cash value somewhere around $5-6 - and no tax will be charged on the free meal.
What if WestJet let us use the WestJet Dollars for free meals. Tax?
#7
Quote:
Ah! So you think it is not a question of Canadian tax law, but a simple matter of execution. Hmmm...Originally Posted by Ace Cdn
what I am saying is that in the ticketing transaction it is treating your Westjet dollars as currency similar to if you have money in you travel bank. So Sabre charges tax on that accordingly. It is the way the system is set up.
Interesting thought!