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Shopping in the U.S – Duty Free Allowances

Cross Border Shopping

With the Canadian dollar at it’s strongest levels in 30 years relative to the USD, if you’re anything like me, you may be thinking about doing some shopping in the U.S to save a few dollars.  But how much will those trips across the border cost you if you do decide to load up on consumer purchases?  How much are you allowed to bring back?

I did some digging and came across the article from the Canada Border Services Agency that explains all the exemptions and maximum purchases (without paying duty) that you can make depending on how long your stay is in the U.S.

How much can I bring back without paying any duties?

Time Period Max $ Amount Cigarettes Tobacco Cigars
Liquor
24 hrs $200 CAD none none none none
48 hrs $800 CAD 200 200 tobacco sticks/200 gms of tabacco 50 1.5L of wine or 1.14 L of liquor or 24 355 ml cans/bottles of beer

Updated Oct 2012. All the info above was referenced from the CBSA.

Where can I check the current exchange rate?

  • My personal favorite site for exchange rate information is: XE.COM

What is the best way to pay for my purchases in the states?

  • I think that the most convenient way to pay for purchases while in a foreign country is via credit card.  Credit cards, unfortunately, normally charge an extra 2.5% on top of the current exchange rate.
  • If you regularly travel to the states, a viable solution may be to obtain a USD credit card along with a US currency bank account. That way, you can load up on US cash when it’s cheap (like now) and avoid all those currency exchange fees.  You can find these credit cards at any of the major banks.
  • Another cheap solution would be to use Interactive Brokers for your currency exchanges paired with a USD account.  IB has a very low spread, and charge a flat fee of $2.50USD / exchange.  An IB account along with a USD account at one of the big banks would also give you a cheap alternative to obtaining USD.

Those of you who frequently travel to the U.S, how do you save money on exchange fees?









41 Comments, Comment or Ping

  1. Very informative. Of course I live in the U.S. but when I traveled to Niagara falls, I wish I would have planned out the currency exchange ahead of time (definitely something one should consider before traveling).

  2. 2. K.M.

    I live in Niagara Falls, so I travel to New York for shopping almost weekly. There are several places who offer Canadian money at Par right now. Otherwise I let the RoyalBank do the exchange, they have a USD cash machine right in the bank, the exchange fee is waived for RBC customers ($2.50 i think), the % is still there, but minimul. Off topic: When I buy building supplies in the US for my rental property, can I still use those receipts for CDN income tax? IE: CCA or even current expenses?

  3. Hey KM, do you need a RBC USD bank account to withdraw the USD?

    As to your question, i’m not 100% sure, you will have to consult with a tax pro. I would assume though that an expense is an expense for a business regardless of where you buy it. I mean, what happens when international companies import their products from other countries?

    FT

  4. 4. Alex

    I use my RBC client card to withdraw funds from a US ATM. RBC doesn’t charge any fees and they use the current exchange rate. No need for a RBC US bank account either.

    FrugalTrader: It’s important to mention that each province has its own rules for importing liquor. I know the Quebec border is regulated by the SAQ and has limits up to 9L. They also add their own markup. If you plan to import more than 9L, you must leave it at the border, contact the SAQ customs officials, pay the duties, taxes and markup, present yourself with the receipt and THEN you can pick up your liquor.

    There’s more details here:
    http://www.saq.com/pls/devsaq/generator.pp_afficher_page?P_iden_tran=0&P_modi_url=0&P_nom_page=info_saq_comm_p2.saq&P_tab_para=VIDE!VIDE&P_CODE_LANG=2

  5. 5. BLAM

    Something you might want to look into is creating a PO Box in Buffalo or the closest U.S. city. I heard you can either rent it and pay a yearly fee or send it to a mail box store and they’ll hold it for you for a fee that is based on how long they hold it for you ( i think it was $5 a week)

    Some problems you might encounted though are some places don’t ship to P.O. boxes and some places don’t ship to addresses that aren’t the same as your billing address on your credit card (you’ll have to create a mailbox and get a credit card with that address). Also, you still have to cross the border, but they seem to be really loose with shopping these days. Last 2 trips I went for the afternoon and at the border I told them we spent maybe $50-$100 each and they let you through.

    happy shopping …go CAD!

  6. 6. Bootsie

    I’m a cross-border commuter so as you can imgaine, I’m trying to do most of my shopping in the US because my pay cheque doesn’t get me nearly as much as it used to once I convert it. :( It’s made me realize that I don’t actually spend much on non-essentials (like housing and RRSPs which must be in CDN funds).

    One thing I only realized recently is that border guards will 99% of the time let you go no problems if you bring over a case of beer even if you were only over for a few hours. I always declare it but have yet to be asked to pay duty on a single case of beer. The savings is HUGE (though the beer is not quite the same).

    As for building supplies, I’ve been visiting Lowe’s regularly at lunch for items for our rental property over the last couple weeks (we’re doing major updates). The savings is pretty drastic and I try to keep it under $100/day and haven’t had to pay duty / taxes yet.

    KM, I doubt there would be a problem with using receipts from a US purchase. Though I have a US dollar account, I always make the purchase on my Canadian CC so that I don’t have to make up exchange rates. I just check my VISA bill and write the Canadian total charged on the top of the Lowe’s bill and will use that amount for tax purposes.

  7. Bootsie, are you saying that you work in the states and drive back and forth everyday? If so, how does your income tax work? Do you pay to the US govt, or the Cad govt?

    FT

  8. Hi KM
    I *think* you can still deduct those expenses, just multiply USD by the yearly average exchange rate posted by Central Bank

    Same idea goes for income taxes, for USD savings (I used 2006 average posted by CB)

  9. 9. Wiigal

    Hi Frugal Trader & readers,

    I’ve probably spent a thousand dollars or so paying the banks the extra 2.5% on purchases made in the US, online when I buy from US websites & on Ebay. The extra fee also really adds up when you’re purchasing large ticket items such as flights, hotels & car rentals.

    I feel silly now that I’ve never realized that Canadian banks offer USD credit cards. I always thought that I could get a USD credit card if I was in the States. I contemplated applying for a credit card at a US bank but figured I’d probably have to get my statement sent to a US address & decided not to bother.

    Anyways, I read on Redflagdeals that Bank of Montreal has a no fee USD credit card. You can only be offered this credit card if you call their call center & request for an application. It is NOT advertised on their website as a credit card that is offered. Seems like a good deal as the other USD credit cards from other Canadian banks (i.e. TD or CIBC) will charge an annual fee of $25-$35. I called today & requested an application to be mailed to me.

    The rep at BMO also said that you can pick a reward of 0.5% credit to your a/c or airmiles with this credit card. So, not only do you save the 2.5% extra currency charge on your US transactions, you get a little reward back.

    You can just pay the monthly statement balance with USD cash that you exchange on your own. Having a USD bank a/c would help in paying your monthly statement online. Or, you can just withdraw Canadian funds from your a/c, get it exchanged to USD at the cheapest currency exchange place & pay your credit card bill at a BMO location.

    On the Redflagdeals forum, someone also stated that you can have two addresses on your credit card a/c. I.E.. one Canadian address (which your statement gets mailed to) and a US address (for retailers & Ebay sellers which require a “confirmed” address).

    Hope others can take advantage of this. Happy shopping in the US & online.

  10. 10. David

    Also, of course, there are many items that you can bring across the border without paying ANY duties. With the North American Free Trade Agreement, anything made in Canada, USA or Mexico can be brought across the border duty free. In addition, you may be charged GST on purchases that are not GST exempt, but as stated, if the amounts are small, the staff at the border may use their discretion to allow you to bring goods into Canada without paying GST. It always seems to help if you appear to be open about your purchases, and are prepared to address the questions asked in a honest manner, and be prepared to provide receipts for all goods purchased.

    DAvid

  11. 11. Bootsie

    FT,
    Yes, I live in Canada and travel back and forth to work in the US. This year was the 1st time I did my own taxes but basically I pay income taxes in the US and then use that amount as a foreign tax credit in Canada. Because taxes are slightly lower in the US, I usually end up owing Canadian taxes but offset it with an RRSP contribution. The unfortunate part is that, because I never paid any income tax to the Canadian gov’t, I can’t get a tax refund so there’s no incentive to contribute any more to my RRSP than to get to zero owing (which usually ends up to be $2-3k RRSP contribution max). Needless to say, with this in mind and the current exchange rate, I’m on the lookout for jobs in Canada…

    Hope that made sense (despite my rambling!) :)

  12. 12. K.M.

    FT – No, you don’t need a USD bank account to withdraw the US cash.

    Because of the proximity of Niagara Falls to the US, local RBC’s cater a bit more to the exchange of funds ie: RBC ATM’s dispense the US funds from your regular CDN chegueing accounts.

  13. 15. Marc

    so what documents are required these days to cross say from canada (port huron/port stanley)over to the states? i’m canadian…. i have drl and bth also a sin and passport, however some of my friends have either lost or left their id’s at their parents’ homes…. they would have just drl and sin… would these suffice?

  14. If you are Canadian, a passport is required when crossing the border.

  15. I drove over about a month ago – you just need photo id. I had a driver’s license + birth certificate.

    Mike

  16. That’s strange. Then why did they have all the hype about the mandatory passport when entering the US?

  17. Good question – maybe the passport rule applies to flying only?

  18. 20. Steve

    As of January 31st, 2008, Canadians will require government photo ID (ie. drivers licence) and proof of citizenship (ie. birth certificate) to enter the U.S.
    Of course a passport serves both of these purposes… but a passport is not specifically required for Canadians until 2009 – the date keeps getting pushed back.

    With regards to the taxation and exemptions discussed above, everything is pretty accurate… although one poster mentioned only GST is charged on North American goods – not true. CBSA will charge PST (8%) and GST (5%) on almost all goods (North American made or not), at least for Ontario residents. One exception would be automobiles, motorcycles, ATV’s, and snowmobiles – where Ontario Provincial tax collection is left to the MTO.

  19. 21. Steve

    As of January 31st, 2008, Canadians will require government photo ID (ie. drivers licence) and proof of citizenship (ie. birth certificate) to enter the U.S. by land crossing (international flights are a different story). Of course a passport serves both of these purposes… but a passport is not specifically required for Canadians until 2009 – the date keeps getting pushed back.

    With regards to the taxation and exemptions discussed above, everything is pretty accurate… although one poster mentioned only GST is charged on North American goods – not true. CBSA will charge PST (8%) and GST (5%) on almost all goods (North American made or not), at least for Ontario residents. One exception would be automobiles, motorcycles, ATV’s, and snowmobiles – where Ontario Provincial tax collection is left to the MTO.

  20. 22. rob

    as long as you stay in US for over 7 days one person is allowed to bring back $750.00 merchandise without attracting duty. Is this a once a year rule or can you make a number of over 7 day trips and claim up to $750. each time?

  21. Rob, as far as I know, the $750 is per trip, not / year. So yes, you can take as many 7 day trips as you like and bring back $750 each time tax free. However, there may be some limits that i’m not aware of.

  22. 24. kris cheese

    We were wondering how much duty we would have to pay if we purchased a hot water tank over to Lowes. The cost would be approx. $350.00 US. Since they are so much cheaper over there but is it worth it if we have to pay too much duty on it.

  23. Kris, best thing to do is to call the CBSA w/ your inquiry. They should be able to answer your question on the spot.

  24. 26. DAvid

    If the tank is made in the USA, no duty is charged (free trade), however, you will be assessed GST/PST or HST at the border. If it is a gas fired water tank, there may be issues of materials used in it’s manufacture. I know furnaces are an issue, as Canada requires stainless steel heat exchangers, and the US does not. This means you cannot bring a furnace into Canada until you can prove the heat exchanger is SS.

    DAvid

  25. 27. kris cheese

    thank you for your response.

  26. 28. Julie

    How much can I bring back in general shopping from US to Canada, I only go for a few hours shopping.

  27. 29. DAvid

    Julie,
    Usually you can bring back as much as you want, unless the items are assessed duty (usually tobacco & alcohol). Other items, especially if made in the USA are charged no duty due to the Free Trade Agreement. You will likely be charged GST & PST/HST on all taxable items you bring across the border.

    DAvid

  28. 30. John Hall

    I know as a US citizen,after a 48 hour stay in Canada,I can bring back 1 liter of liquor duty free and none if the stay is less than 48 hours. How much, if any, liquor, for my own consumption, can I purchase at the duty-free store in Port Huron and bring into Canada for an overnight stay?

  29. 31. DAvid

    Visitors to Canada are should read this document:
    http://www.cbsa.gc.ca/publications/pub/rc4161-eng.html

    DAvid

  30. 32. kris cheese

    Since I am a US citizen living in Canada for 13 years, I was wondering what steps I would have to take to purchase a vehicle in the US and bring it back to Canada.

  31. 33. Mahnaz

    Hi, I too am interested in purchasing a car in the U.S and bringing it back to Canada. Is there a difference for used and brand new? Is it worth it? Thx.

  32. 34. Steve

    I was in the middle of writing several paragraphs… but I’ll save myself the hassle…

    http://www.riv.ca

  33. 35. godzy

    Stop talking amongst bloggers about legislative questions and get wrong information! Tne CBSA port of entries are open 24/7 rain or shine etc, we give the right information and proper guidance! Also, do not use your GPS as it will send you through the Queenston Lewiston bridge only! This bridge has only 6 lanes of primary inspection lanes. The Rainbow Bridge has 15 lanes and the Peace Bridge has 16 lanes. These 2 bridges are usually always empty. So, if you insist on crossing at the Queenston/Lewiston bridge following your GPS prepare to sit and don’t complain! Remember, stop in on your way out for real answers to your question not from some media blogger or from a friend of a friend!

  34. 36. baile bootd

    Good question!I am a US citizen living in Canada for 13 years, I was wondering what steps I would have to take to purchase a vehicle in the US and bring it back to Canada.

  35. 38. bree

    hi i want to take my daughter back to school shopping in the states just for the day , but i dont no how much i can bring back before i pay duty. When i look it up its says $50 dollars worth , but i dont no if that is right . Does anyone no how much i can bring back. thanks bree

  36. 39. bree

    hi i want to take my daughter back to school shopping in the states just for the day , but i dont no how much i can bring back before i pay duty. When i look it up its says $50 dollars worth , but i dont no if that is right . Does anyone no how much i can bring back. thanks bree

  37. 40. L.

    How much van you bring back if you are in the US for 39 Days or more?

  38. 41. victoria

    The amazon.ca rewards visa doesn’t charge you the 2.5% convenience fee and gives you cash back – it does use the daily exchange rate, however.

    Also, I have a USD bank account and transfer funds to it with Paypal.

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