Is charging tax on gift cards/certificates illegal?

A local 7-eleven in my area charges HST 12% tax on all gift cards and certificates while no other retailer does so. Many other people say it's illegal since it's supposed to be an equivilant exchange of funds into the form of a card. This also applies to game cards to apparently, since they count as real money being exchanged as credit for something different.

Does anyone know to what extent this is illegal? I'm asking because for years I've been buying bus passes and gift cards for my family for holidays and I wanna know if I can get my money back from illegal tax transactions. :f6:

I know that visa/master cards have an activation fee, but every other card that I know of is not taxable anywhere else except this store.

This is also in Canada btw.

You might want to research this further, and perhaps contact the appropriate people and see what its all about. This sounds very unusual, given the things you described.

In America there was a 7-11 that did that as well. I have no idea whether it is illegal or not however since I just went to another store that didn't charge tax.

Does anyone know to what extent this is illegal?

It's not. It probably should be, but it isn't. I've already taken this up when it first happened to me. Asked my dad's friend who is his lawyer.

To my knowledge, this isn't illegal, but it doesn't make sense either.

Here in Vancouver, you pay the value of the gift card (+ maybe a small handling fee...at a shopping mall called Richmond Centre, they charge you an extra $2.50 per card, mainly because it can be used at other affiliate malls too), and that's that. Thing is, when you buy something with the card, you get charged tax, so if they charge tax on the gift card initially, you're essentially paying double tax for your purchase.

Next time you go there to charge a gift card, ask them that: "When I or whoever I give this gift card to use it to buy things, am I or they being taxed? I mean...I'm already being taxed now for it, so when I or whoever I give this to uses it, there should be no applicable tax since the tax has already been charged, right?" See how they answer. I'm curious.

Eh just go to Shoppers. They won't charge any tax.

It's probably better to get a prepaid credit card since Nexon doesn't charge tax. Even without tax, we're paying 5 extra dollars per 25k nx when we buy Nexon cards.