Import Limits

A number of our clients own or operate businesses in Whatcom County. They come to Carmichael Clark for a variety of reasons: entity formation, business maintenance, transactions, property purchases, land development and litigation, among others. While their legal issues differ, one thing is shared; all of them locally are affected by Canadian consumers.

It is estimated that 30 million Canadians make overnight, cross-border trips to the United States annually,[1] and judging by the Guide Meridian on a Saturday afternoon, most of them are here in Whatcom County. They come to eat, shop, stay the night, buy real estate, and generally spend money in our economy. For local business owners; this is a good thing.

As if these wayfaring consumers needed more encouragement, the Canadian government has, as of June 1, 2012, decided to quadruple the personal tax exemption limits for those bringing back purchases from the United States effectively making it cheaper to stay and shop in Whatcom County. Personal tax exemptions allow you to bring goods of a certain value back across the border without having to pay the regular duties that apply to those goods. In other words, these items are Duty Free.[2]

The Duty Free limits depend on how long you stay and shop in the United States. Below are the limits as the existed prior to June 1st, and then thereafter:

• 24 Hour – $ 50 Canadian Dollars (“CAD”) – Starting June 1, 2012, the NEW LIMIT is: $200 CAD
• 48 Hour– $400 CAD – Starting June 1, 2012, the NEW LIMIT is: $800 CAD
• 7 Day – $750 CAD – Starting June 1, 2012, the NEW LIMIT is: $800 CAD

Canadian Immigration Minister Jason Kenney told The Vancouver Sun the low exemption limits prior to June 1st, have stifled Canadians’ desire to shop across the border, and raising the ceiling will simply reduce their tax burden and encourage more shopping. He said,

“(The existing exemption rates are) a long-standing irritant for most Canadians, particularly the 90 per cent who live fairly close to the U.S. border, and we think consumer choice is a good thing, and this just basically means lower taxes, in the form of duties, for consumers,”[3]

This consumer friendly position represents a new direction for the Canadian government, and we in Whatcom County should take note. The tax exemption, coupled with a new program being promoted by the Bellingham/Whatcom Chamber of Commerce called “Canada Certified” that allows local businesses to accept Canadian debit cards, will clearly mean more cross-border consumers. Buyers need places to shop, and Whatcom County is in a unique position to provide.