Who We Help · Paving & Concrete Contractors · Cross-Border Tax
Paving and concrete cross-border tax: buying US equipment without importing surprises
For most paving and concrete contractors, cross-border tax is not about US customers; it is about US iron. Pavers, rollers, milling machines and dump trucks are routinely bought at US auctions or from US dealers, financed in US dollars and serviced by US-owned suppliers. Each step has a Canadian tax consequence that is small when planned and expensive when discovered at the border.
By the AnalytIQ Accounting team · Last reviewed: September 12, 2026
At a glance · paving and concrete contractors
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What actually happens when the machine reaches the border
Every piece of equipment you bring in from the US is a commercial importation, and three things happen at once. First, GST of 5 percent is assessed on the value for duty in Canadian dollars; as an HST registrant importing for commercial use you pay only the federal part at the border and recover it as an input tax credit on your next return, so it is a cash-flow cost rather than a real one. Second, duty is assessed by tariff classification and origin. Much of the self-propelled construction machinery in Chapter 84 of the Customs Tariff is duty-free regardless of origin, and US-made equipment with valid CUSMA certification is duty-free in any case, but a machine built in Japan or Germany and bought at a Texas auction is classified on its own merits, so we check the HS code before you bid. Third, since October 2024 commercial importers must be registered in the CBSA's CARM Client Portal and post their own financial security or arrange to use a broker's, a step that stalls a delivery if nobody has done it.
Two further points depend on the year. Canada applied surtaxes to lists of US-origin goods during 2025 and has changed those lists more than once; as at the time of writing, the current surtax list should be checked against your HS code before any purchase, because a surtax is not recoverable the way GST is. And on-road vehicles — a used tri-axle from a US dealer, for example — go through the Registrar of Imported Vehicles process and admissibility rules that do not apply to off-road machines, with their own paperwork and fees.
The auction bill: premium, state tax and the exchange rate
A US auction invoice has more on it than the hammer price, and most of it belongs in the tax cost of the machine. The buyer's premium, transport to the border and on to your yard, customs brokerage, any duty or surtax, and the cost of making the machine road-legal or compliant are all part of the capital cost for CCA. The GST paid at the border is not, because you recover it. Some US auction houses will waive state sales tax when the machine is exported with proper documentation and some will not; we confirm before the sale, because sales tax paid to a US state is not recoverable in Canada and simply adds to cost.
Everything is then converted to Canadian dollars at the exchange rate on the date of purchase, which fixes the capital cost for the life of the asset. Paying in USD from a Canadian account, from a USD account or through an FX provider does not change that; it changes the bank's spread. We record the purchase using the rules for USD transactions in Canadian books, so the fixed-asset register, the CCA schedule and the loan all agree on one Canadian-dollar number.
| Cost component | Part of the CCA cost? | Notes |
|---|---|---|
| Hammer price | Yes | Converted at the purchase-date exchange rate |
| Buyer's premium | Yes | Part of what you paid to acquire the machine |
| Freight to the border and to your yard | Yes | Including dismantling, permits or escorts for oversize loads |
| Customs brokerage | Yes | A cost of acquisition, not an operating expense |
| Duty or surtax | Yes | Not recoverable; check the HS code and origin before bidding |
| GST paid at the border | No | Recovered as an input tax credit on the next return |
| US state sales tax, if not waived | Yes | Not recoverable; confirm the export exemption before the sale |
US-dollar financing and US-owned suppliers
Much of the equipment financing in this trade comes from manufacturers' captive finance arms and from dealers, many of which contract through Canadian affiliates. Where a loan is actually made by a US lender at arm's length, Canadian withholding tax on the interest generally does not apply — arm's-length interest paid to non-residents has been exempt from Part XIII withholding since 2008, with exceptions for participating debt — so the payments go out gross. The item to watch is the currency: a USD loan repaid from Canadian-dollar revenue produces exchange gains and losses on each payment, and because the loan financed a capital asset, those are generally capital gains and losses rather than ordinary income.
US-owned suppliers raise a different question when they send people rather than parts. A US technician who flies in to commission a paver or repair a milling machine is providing services in Canada, and the fee is subject to 15 percent Regulation 105 withholding unless a waiver is in place, reported on a T4A-NR. Parts and warranty items shipped from the US are simply further imports, with the same GST and origin questions. Our guide to paying a US contractor from a Canadian business covers the withholding mechanics.
The rare US job, and owners who are US citizens
US work is uncommon for Ontario paving and concrete contractors, but companies near Niagara, Sarnia and Windsor do get asked. Before pricing it, the list to weigh is state contractor licensing, US payroll and workers' compensation for crew on site, state sales tax on materials, temporary importation of the equipment and its return, and the treaty rule that a construction site becomes a US permanent establishment once it lasts more than twelve months. A short job can usually be structured so that no US federal income tax arises, with a protective 1120-F filed to preserve that position; a long one is a US business. For most contractors, our honest advice is to price the compliance into the bid and see whether the job still makes sense.
Finally, if an owner-manager is a US citizen or green-card holder, the Canadian corporation itself is a US reporting item — annual information returns and the GILTI rules apply — regardless of where the work is done. That is a personal cross-border file rather than a paving question, and we handle it alongside the corporate one. Our cross-border tax services page covers the full two-country toolkit, and the CFO page for paving contractors shows how the fleet decisions that drive these imports are made in the first place.
Source: CBSA — CARM: CBSA Assessment and Revenue Management.
What we take off your plate
Cross-border tax for paving and concrete contractors, handled.
- US auction equipment landed cost tracked for CCA, duty included
- GST paid at the border claimed back as an input tax credit
- 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 paving and concrete contractors.
- Booking a hot-mix or ready-mix invoice to overhead instead of costing it to the job it paved
- Recognizing HST on a progress certificate before the 10 percent holdback is actually released
- Skipping T5018 slips for subcontractors because the crew was paid by e-transfer
Recognise one? Book a call and we will tell you what it is costing you.
Services for paving and concrete contractors
Six services, one team that knows how paving and concrete contractors 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
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Common questions.
Do I pay duty on a used paver bought at a US auction?
It depends on the tariff classification and where the machine was built. Much construction machinery is duty-free under the Customs Tariff and US-origin equipment is duty-free under CUSMA, but a non-US-built machine and any current surtax list both need checking against the HS code before you bid.
Is the GST I pay at the border a real cost?
No. As an HST registrant importing for commercial use you pay only the 5 percent federal part and recover it as an input tax credit on your next return, so it is a timing cost, not a permanent one.
What if a US technician comes to service my machine in Ontario?
Fees for services performed in Canada by a non-resident are subject to 15 percent Regulation 105 withholding unless a waiver is obtained, and the payment is reported on a T4A-NR. Parts shipped from the US are ordinary imports.
Related reading
US equipment, landed and costed correctly.
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