Who We Help · Car Dealerships · Cross-Border Tax
US auction cars, USD floorplan: cross-border tax for Canadian dealers
A US auction buy only makes money if every border cost was in the bid. The mechanics are knowable: the RIV program and its fee, duty that depends entirely on where the vehicle was assembled, 5 percent GST at the border that a registered dealer recovers in full, and excise add-ons like the $100 air-conditioning tax. The costs that ambush dealers are the ones that shift — counter-tariff surtaxes on certain US-assembled vehicles and the exchange rate on a USD floorplan. We price the border into the deal before the hammer falls.
By the AnalytIQ Accounting team · Last reviewed: September 12, 2026
At a glance · car dealerships
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The landed cost of a US auction car, line by line
Every US unit you bring north carries the same stack of border charges, and each behaves differently in the books — some are recoverable, most become part of inventory cost. Getting the stack right per VIN is what makes your gross-per-unit numbers real rather than optimistic.
| Border cost | When it applies | Recoverable? |
|---|---|---|
| RIV program fee (about $325) | Every US-market vehicle entering the RIV stream | No — inventory cost |
| Duty at 6.1% | Vehicles that are not CUSMA-originating — assembly plant decides, not the auction location | No — inventory cost |
| GST at 5% | Every commercial import, on the converted value | Yes — full input tax credit for a registered dealer |
| Air-conditioning excise tax ($100) | Any vehicle with air conditioning | No — inventory cost |
| Green Levy | Passenger vehicles with weighted fuel consumption of 13 L/100 km or more | No — inventory cost |
| Counter-tariff surtax | Certain US-assembled vehicles under Canada's 2025 tariff-response orders — scope has shifted repeatedly | No — confirm current status before bidding, not after |
Two process points decide whether the paperwork clears cleanly. US Customs requires export formalities on used self-propelled vehicles 72 hours before the truck reaches the border, so the export filing has to start the day you win the bid. And admissibility is not universal: the RIV program governs which US-market vehicles can be modified and inspected into Canadian compliance, and salvage-history units carry branding consequences into provincial registration. A vehicle you cannot register is not inventory — it is a write-off with a story.
The border GST is not a cost — if your books treat it correctly
The 5 percent GST collected at the border is a full input tax credit for a GST/HST-registered dealer, and the provincial portion of HST is not charged on a commercial import — you collect HST from the retail buyer when the unit sells. The failure mode is administrative: entries cleared under a broker or transporter account that never reconcile to your ledger, ITCs claimed off invoices instead of customs entries, and a CARM statement nobody checks. We reconcile customs entries to ITC claims monthly through our dealership bookkeeping, so border GST flows back as fast as you pay it.
USD floorplan: the financing is a currency position
Floorplanning US buys in US dollars means your inventory debt moves with the exchange rate every day you hold the unit. Because floorplan is inventory financing, the resulting FX gains and losses are ordinary income, not capital — they belong in gross profit per unit, where they change your real margins. A USD-denominated unit financed by USD debt is a natural hedge until the day you sell in CAD and repay in USD; the gap between those dates is where curtailments, interest and rate moves quietly eat the deal.
The bookkeeping answer is unit-level landed cost in CAD: purchase price at the transaction-date rate, plus duty, fees and transport, with floorplan interest and FX tracked to the VIN. Two year-end items deserve deliberate handling: USD floorplan balances outstanding at year-end are revalued, with the movement recognized in income, and units bought at auction but still in transit belong in inventory with their border costs accrued — not appearing for the first time when the transporter drops them in the lot. Dealers who track landed cost per unit stop arguing with their statements about why the US cars look profitable at the auction and thin at the year-end.
Wholesaling south: the flip side of the arbitrage
When the exchange rate flips the trade, Canadian dealers run units into US auctions. The Canadian side is friendly: a vehicle sold and delivered to a US buyer is a zero-rated export — no GST/HST on the sale, your ITCs intact, provided you keep proof of export. On the US side, occasional wholesale sales through auctions generally leave a Canadian dealer without a US permanent establishment, so the treaty keeps the profits taxable only in Canada; where southbound volume becomes a program rather than an event, we document that position with a treaty-based disclosure and watch state-level dealer licensing rules, which operate independently of the treaty. The full toolkit — protective filings, W-8BEN-E requests, treaty positions — lives with our cross-border tax services.
Source: CBSA — Memorandum D19-12-1, Importing Vehicles into Canada.
What we take off your plate
Cross-border tax for car dealerships, handled.
- Landed cost on US auction units built from RIV, duty and GST
- USD floorplan exposure tracked separately from vehicle cost itself
- Canadian and US returns prepared by one team
- Treaty positions and foreign tax credits lined up
- FBAR and T1135 foreign reporting
- ITIN applications certified in-house
Mistakes we fix
Three things that go wrong for car dealerships.
- Booking F&I income as fully earned at the deal date instead of net of the chargeback reserve
- Recording customer deposits and trade-ins as revenue instead of liabilities and inventory
- Letting a flat-rate technician’s pay clear minimum wage on flagged hours instead of clock hours
Recognise one? Book a call and we will tell you what it is costing you.
Services for car dealerships
Six services, one team that knows how car dealerships run.
Start with one. Add the rest when it makes sense; the books, payroll and tax already talk to each other.
Free proposal
A fixed fee for your cross-border tax work, in writing.
- Tell us about your business. The form takes about a minute.
- A short discovery call. Fifteen minutes to confirm what you need.
- A fixed fee in writing. We reply within one business day. No hourly surprises.
- Canadian and US filings under one roof
- Cloud-first: QuickBooks Online, Dext, Wagepoint
- Brampton, Ontario, with clients across Canada and the US
Related answers
Browse all 200 answers.
Common questions.
Is the GST we pay at the border on US auction cars a real cost?
Not for a registered dealer — the 5 percent border GST is a full input tax credit, and the provincial HST portion is not charged on commercial imports. It only becomes a cost when entries never get reconciled and the ITC goes unclaimed.
Do we pay duty on every vehicle we import from a US auction?
No — duty follows assembly origin, not where you bought it. CUSMA-originating vehicles enter duty-free; overseas-assembled units carry 6.1 percent, and certain US-assembled vehicles have faced counter-tariff surtaxes whose scope has changed several times, so we confirm status per VIN before bidding.
Does selling our units into US auctions create US tax?
The sale is a zero-rated export for GST/HST, and occasional auction sales generally leave no US permanent establishment, so treaty protection applies. Sustained southbound volume deserves a documented treaty position and a check of state dealer-licensing rules.
Related reading
Landed cost you can trust, on every VIN.
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