Does Costco Canada charge tax on the full price before the Instant Savings?

After taking a trip down to Washington State not too long ago, I noticed some text on the bottom of each price marker that stated,

“Sales Tax may be due on all or part of pre-discount price.”

That same week, I received the Executive Member Coupon booklet, where I saw this statement in the Terms and Conditions of each coupon,

“This is a manufacturer’s coupon; all applicable taxes will be based on selling price prior to discount on the coupon.”

This got me wondering how taxes were charged in Costco Warehouses in Canada when an item went on sale. Unfortunately, (and I keep all my Costco receipts) I have never been able to escape a trip to Costco with only one sale item.  My large, multiple item receipts that I usually leave with were too complicated to decipher how tax was being charged on my purchases.

After a couple one item trips to Costco, I can finally confirm that the answer to “Does Costco charge tax on the full price before the Instant Savings?” The answer is – IT DEPENDS.

Whether or not tax is charged on the full price before discount depends on the type of rebate.

  1. INSTANT SAVINGS – Tax will be only be charged on the discounted price.
  2. EXECUTIVE MEMBER COUPONS – Tax will be charged on the selling price prior to the discount

I have attached the receipts of some of my latest purchases I made so you can see for yourselves!

The fact that the Executive Member Coupons charge tax on the full price before the discount decreases the value of these coupons. For example, the month before the Executive Member Coupons were valid, Bounty Paper towels were on sale for practically the whole month of March.  If you purchased the Bounty Paper Towels during the “Instant Savings” you would have paid $17.91 after tax (in BC).  If you purchased the Bounty Paper Towels using the Executive Member Coupons, you would have paid $18.39 after tax (in BC). The difference in this price is $0.48. Essentially this take the coupon value from $4.00 off to $3.52 off.

If you are a regular visitor to this blog, you will know that many of the items you find in the Executive Coupon Booklet go on sale on a regular basis. If you can plan your purchases to coincide with the Instant Savings you will save yourself a little bit of money.  With gas prices the way they are headed this summer, every dollar helps!

Happy Shopping Everyone!

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