Can you help with this Canadian GST/HST dilemma?

Dasein, I don't disagree that the quote is binding once accepted. I disagree that tax is part of the quote, as it is not part of PersonPerson's compensation for the service provided.

I disagree that tax is part of the quote, as it is not part of PersonPerson's compensation for the service provided. The quote is not for "compensation for the service provided"; it's for the amount that will be owing by the customer. The customer doesn't care how much of that ends up compensating you. If tax is extra, a quote should say that. Otherwise, the amount quoted is the amount owing. You can't import further terms to the contract later on. It sucks, and if I were the customer I would try to think about whether I'm being reasonable, but that's why some statement as to the tax is a routine part of any quotation.

IANYL. You've entered into a binding contract to be paid the amount specified for the work specified. Absent any mention of tax, your customer is entitled to pay you the amount contracted for, and it's up to you to deal with the tax authorities as appropriate.

I agree with those that say that tax is usually considered an "extra," but in almost every circumstance where I have received a quote from a contractor or freelancer, the tax has been included in the final total and I would assume that to be the final price that I would pay. Dasein is right in that the customer isn't going to be concerned with what portion of the bill ends up compensating the freelancer; covering the tax obligation of their business is the business owner's responsibility. The fact of the matter is that this is an area of ambiguity. You presented your client with a price for your services and didn't stipulate that you were then going to charge him for the taxes that you would then owe to the government. It sucks, and maybe there was a lot that should have been assumed by your client, but when there is ambiguity in a contract I would say that the benefit goes to the individual that did not write the contract.

Just call up the GST/HST folks. They're very, very helpful and very friendly. I have to wonder though about the size of your client - it sounds like they're not even incorporated, because virtually every incorporated business (as well as sole proprietors/freelancers) are going to have a GST/HST number, so paying HST etc. is not going to be anything out of the ordinary. The beauty of GST/HST is the input tax credit - your client ought to be receiving HST tax credit back at the end of their fiscal year. So it sounds like you're dealing with an individual, and if it's an individual it's likely they can't pay the tax. If you're dealing with an organization, it sounds like it is very, very unsophisticated. Either way, eat the loss and drop these losers.

Your client might be assuming the quote is a proforma invoice where all charges including taxes are quoted. They're often used for future billing expenditures by companies for calculating import/export duties etc. and make clear that GST/HST applies When you do I'd write "plus applicable taxes" and include an expiry date for the quote. That way you're better protected if the government raises the tax rate, or you want to increase your rates in the future.

I'm not sure it's helpful for me to be in this thread arguing my side. It's not, but that's more because you need to recognize that this isn't an issue of appealing to a third party or standard. As you say, it's a misunderstanding, and resolving this is a customer relationship issue, not a "legal" issue. Approach it from that perspective.

If you're selling hockey skates in a store, and the customer only finds out about the additional HST at the cash, it's very easy for them to decide to walk away and not buy the skates. While you might have liked to sell those skates right then to that person, another customer is likely to come along. No big deal. But if the customer comes to you for, say, a web site, you do the work, and, to their eyes, then stick them with an additional 13% on the invoice, they're going to feel blind-sided and pressured to agree to that charge. True. But if I order a meal in a restaurant, the price on the menu usually does not include GST/HST. By the time the bill comes, I have already ordered and eaten. Usually there is GST/HST added to the advertised price on the meal, and I'm on the hook for that charge. Anyhow. I'm not sure it's helpful for me to be in this thread arguing my side. I'm sort of more hoping to find something that can help me and the client settle this. (And to be clear - the client isn't exactly refusing to pay, nor am I exactly insisting. We just have different initial understandings of the situation, and I'm trying to find some extra information to help resolve this...)

I'm really surprised there's not some external legal standard - some sort of precedent. My sense (eg - from the article I linked to above) is that for retails sales, there's at least some legal basis to the idea that advertised prices should be assumed to be exlusive of GST/HST. Is that right? If so - I wonder how that same principle might that apply or not apply to a service for a client?I think the difference between a mass-produced good and a custom service is relevant here. If you're selling hockey skates in a store, and the customer only finds out about the additional HST at the cash, it's very easy for them to decide to walk away and not buy the skates. While you might have liked to sell those skates right then to that person, another customer is likely to come along. No big deal. But if the customer comes to you for, say, a web site, you do the work, and, to their eyes, then stick them with an additional 13% on the invoice, they're going to feel blind-sided and pressured to agree to that charge. A lot of people may grudgingly pay it (and never do business with you again, badmouth you to everyone, and generally do you no long-term good), while others, like this client, will fight you. When you sell mass market goods, your customers are pretty fungible. When you sell services (or custom goods), it is your responsibility as the seller, I believe, to clearly communicate the final cost to the customer. You do not want either one of you to be left unhappy at the end of the transaction with a custom product that sold for less than a fair price (your perspective) or more than a fair price (your customer's perspective) and which almost certainly can't be resold at a sufficiently high price to make up the difference.