I’ve been from the States into Canada and back a few times. Likewise I’ve been overseas a couple of times. I don’t understand how ‘duty free’ stores work.
Either at the airport or at the US-Canada border there are the stores you can purchase items. I don’t understand the value of purchasing these items at a duty free store…why would I want to do that? I don’t know what items are for sale in such stores. And I don’t know how these transactions take place exactly. I seem to remember ‘official’ looking people coming on the plane to distribute bags of goods to passengers, and maybe I saw a little golf cart carrying such goods across the border. Does this have something to do with ‘duty free’ goods.
The purchase takes place exactly like at any other place, except that in most airport Duty-Frees you need to show your boarding pass as proof that you are traveling internationally, and that local sales tax does not apply. So, even if the base price is the same as at the local stores outside the airport, there can be a substantial savings simply on the tax. Other than that, it’s get item, show pass, pay for item, get bag with item.
As to why: if you already know that you’re going to travel and that you’re interested in the kind of goods on offer at the airport, you can study the local market, but many purchases are unplanned ones anyway. Many of the items offered aren’t found in other kinds of stores, or not very easily. So, if you have long wanted an MnM dispenser (a former coworker had one), and you haven’t seen one in a regular store, and you see one at the airport… blingo! Your current coworkers will be soooo envious (at least mine were, and I still have the dispenser)
Not as substantial as they might be - The duty free shops have to pay a lot for just being at the airport, and they take a much bigger markup on the wholesale price.
On cross channel ferries and cruise ships, the shop is a big revenue earner. People on holiday are in spending mode so they will buy overpriced junk. Even stuff like tobacco, wines and spirits may well be cheaper at a warehouse just outside the dock gate.
So if I were in Canada coming back to the States, I could buy a bottle of liquor, and not pay Canadian sales tax (do they even have that?)on it…as well as not pay US tax on it? Are there other taxes other than sales tax that I wouldn’t pay if purchased in Canada, coming back over?
I don’t know squat about tobacco goods prices, but I do know several categories of premium liquor, and the prices I see in duty-free shops (airports and on a recent cruise) were no better than warehouse prices within 20 miles of my home.
For that matter, New Hampshire used to be the place to stock up if you were crossing their 11-mile border-to-border stretch of I-95 with gummint liquor stores so big they had their own offramps. Last few times through, I passed and stocked up at my usual place in Massachusetts - much cheaper.
The only times I’ve ever bought duty-free goods were when I was traveling overseas and someone wanted me to buy something for them. As I don’t normally buy alcohol or cigarettes, I wasn’t paying attention to how the goods were priced compared to a store in the US. Aside from liquor and cigarettes, the other things I see sold in the duty-free shops are luxury goods like perfumes and watches. These are goods that typically I can purchase at discount in the US if I shop around. So I assume the appeal is to foreigners for whom these goods are either unavailable or are expensive at home.
When Mrs. Greenjeans travels to Canada, she’s picked a duty-free bottle or two of Sheridan’s Coffee Layered Liqueur, which–for some reason–is not available in the US. I don’t like coffee even a little bit, but this is yummy good stuff.
That may well be the case in your area, but liquor is heavily taxed here in Ontario and duty-free offers very substantial savings, all the more remarkable when you consider that – as someone already pointed out – the duty-free stores have to pay a fortune for floor space at the airport. When I traveled to the US often, I would usually pick up the maximum amount that I could legally bring back.
The process is designed to make it virtually impossible to buy the stuff unless you’re really leaving the country, which is why you don’t physically get possession at the store, and it’s distributed right at the boarding gate. Although one time when my international flight was canceled because of bad weather my compensation was returning home with two big bottles of duty-free liquor. When I came back for my flight the next day I was back at the duty-free for more.
Duty free stock tends to focus on cigarettes, alcohol, and cosmetics, which are usually taxed rather heavily, tourist junk, and the usual impulse buy stuff (candy, soda, etc.).
If you’re crossing at a port org land border where space is not as limited/expensive, the savings can be worth the extra few minutes it takes to stop at the store (rather than just continuing on your trip uninterrupted).
Here in Connecticut as well, plus other archaic liquor laws that make it expensive and harder to buy than many states. I can buy a 750mL of Knob Creek at local stores for around $65, drive 15 miles to a CT warehouse store and get it for $50 or sometimes a little less on sale, or drive about 15 miles to MA and get it for $35. (The NH price was just under $40 for a while after we moved here, and we stocked up on trips to see family in Maine. Now it’s closer to $50 most of the time.)
If you don’t have much choice in your local-regional purchasing, I can see how it would be a good buy. But it was $45-50 duty free where I saw it recently.
Theoretically, there is a special outlet location, that for tax purposes is outside the taxing jurisdiction. So a liquor or tobacco product can be sold there, without any taxes having been assessed on it. The buyer of a Canadian whiskey has two choices after he buys it. He can take it back into Canada, but will have to pay all Canadian taxes in order to do so, so gains nothing. Or he can take it into the USA, where customs officers will allow it to be imported tax-free to any person coming from Canada and meeting any other restrictions.
The same thing applies to, say, French perfumes. The seller in Canada, being outside Canada’s tax jurisdiction, pays no import duties when acquiring the product, nor any other taxes. The buyer can import it duty free into the USA. But if it were bought by a Canadian, duties and taxes would have to be paid on it, because it is then being “exported” from the duty free shop into Canada, and the Canadian, who is not entering from the USA, has no duty-free privilege.
:eek: Which kind? I see regular for $29, Single Barrel Reserve for $50, and Rye for $43.
If you want a drink while traveling, they are $5-6 on the plane, $6+ in the airport bars for even Bud Light. Getting something that’s not available back home or much more expensive is a good use of a duty free.
Couldn’t you just put it in a checked bag and be done with it? I don’t expect the baggage inspectors to be versed on fine perfumes and where they are available. You could have easily brought it to and from home. Packaging would be the main problem.
I believe you’re not supposed to drink any liquor during a flight except for what the flight attendant sells or gives you. So drinking from the duty-free bottle is against the rules. And as for putting the perfume in the checked bag, are you suggesting doing that with the stuff purchased in the duty-free shop? Because that won’t work, as the DFS is after you’ve checked you luggage. And if you just pack perfume you’ve bought in the US, it counts against your duty limit. (You’re only allowed to import a few hundred dollars in merchandise.)
When you return to the US you must declare what new things you are bringing back and their value. There is some lowish ~$1000 per person exemption that you do not owe tax on. I am sure that many people under value the stuff they bring back to the US to avoid tax. There is probably very little risk in bringing back small amounts of goods that can be brought over in the amount of luggage that people typically vacation with. I have never had my luggage inspected by the US border agents that you hand the declaration to.
There is no problem with choice in terms of selection. It’s one of the good things about the Ontario liquor board which has come a long way since the days of grimy hole-in-the-wall stores where limited liquor stocks were kept in the back room and fetched out by begrizzled oldsters. Stores are large and bright and have excellent selections now, and will order in anything they don’t have. The problem is choice in terms of lack of competition. Now, as then, the liquor board here is a ruthless monopoly with a pricing policy that uses the code words “social responsibility” as an excuse for extortionate gouging. This is why duty-free is such a great deal despite the huge overhead costs these stores incur from the airport.
Or, as I routinely did, you can bring it back into Canada duty-free under the normal travel exemption.
Duty free purchases are an option for a person who is directly departing one jurisdiction enroute to another international jurisdiction.
An important point to note, the item is free of duty only in the jurisdiction where it is purchased. It may be subject to duty in the locale it is imported into.
So, for example, the tourist departing Miami on a flight to Cayman can buy four liters of duty free liquor cheaply - booze which was not subject to US import duties. However upon arrival in Cayman he finds out that he can only bring in one liter duty free and the other three bottles will be subject to Cayman duty charges, a hefty charge indeed.
It’s been a day of [choosing | selecting | picking] the wrong word. I mean lack of economic choice, not product choice. Because of CT’s archaic laws, it’s a lot like Canada here even though it seems like there is a competitive and varied marketplace. Floor prices, high taxes, undemanding customer base, adjacent states with much lower prices… it’s pretty stuck on the self-satisfied and expensive end.
Not that it matters to me as much these days as in times past.
Back when I was a smoker, cigarettes were way cheaper at the duty-free shops. I’d always buy the limit whenever I traveled internationally. Of course, I live in NYC, where the tax on cigarettes is punitive.
And if I was in New Hampshire, I’d buy a whole bunch. Like five cartons.
(at least mine were, and I still have the dispenser)