As we unpack our ghouls and goblins decor and costumes this Halloween, it might be interesting to know why some of these items cost a little more than others at the store.
So what are you paying for as a consumer for your Halloween supplies?
In this blog, we will look at the difference in duty costs for popular Halloween necessities: costumes, treats, and decorations (oh my!)
Last year it was estimated that nearly 14 million households participated in Halloween 2019. Some of the main components of trick-or-treating are decorations and costumes. Between the spider webs, jack-o-lanterns, and haunted house displays, we spend a lot!
Costumes of any kind will fall into two categories based on their end use: single or repetitive.
Using the popular inflatable T-Rex costume as an example, let’s discuss the difference in import costs based on end-use.
These air-filled costumes have been making a splash on the Halloween scene for a few years now. You can hear them coming a mile away with the swish of the tail on the carpet as your co-worker waddles past your office.
These costumes are made of several components:
- 100% woven polyester
- Battery operated fan
If you are importing T-Rex costumes on a commercial basis and reselling them for single-use, they will fall under tariff classification 9505.90.00.90 and would be duty-free. This classification covers all components of the costume.
If you are importing the T-Rex costume on a commercial basis for your costume rental shop, for repetitive use, the tariff would be 6204.23.00.00 at 18% duty. Yikes, that’s a scary duty rate!
The above two scenarios offer another example of why end-use plays such an essential factor in Tariff Classification. It can determine the difference between a 0% duty rate and an 18% duty rate.
Luckily, seasonal decor items used in holidays such as Halloween are duty-free upon importation into Canada on a commercial basis (Tariff Classification Code: 9505.90.00.90). Also, the pumpkins that we carve into scary jack-o-lanterns are duty-free.
National Resources Canada (NRCan) regulates firecrackers in addition to the Canada Border Services Agency (CBSA). When importing firecrackers commercially, importers will be required to obtain an explosive permit issued by NRCan. The tariff classification for these is 3604.10.00.00, and they carry a 6.5% duty rate.
Halloween is a little lackluster without the treats (in our humble opinion). Those little fun packs of goodness are just so darn tasty! But did you know that chocolate and candy carry different duty rates?
It’s true, chocolate (tariff classification:1806.32.00.10) has a lesser amount of duty paid. Upon commercial importation, chocolate bars carry a duty rate of 6%.
Candy made of sugar (classification code: 1704.90.90.50) however, has a higher rate of duty of 9.5% upon commercial importation.
Using Free Trade Agreements
Note on Free Trade Agreement Usage: It’s important to note that all the duty rates listed in this blog can be eliminated or reduced if the goods imported (commercially or personally) originate in a Country in which Canada has an existing Free Trade Agreement. Commercial importers will be required to provide proof of origin on their import documentation showing the items were both made in and shipped from that Free Trade country. Personal importers are not required to provide this certification.
Have a safe and Happy Halloween, importers!