Whether you're looking for a bargain or in search of something special, you may want to cross the U.S.-Canada border to shop. You'll need your passport, passport card or NEXUS card and, of course, a way to pay for your purchases. Before you load up your shopping bags, though, you'll need to understand what and how much you can bring back across the border.
Limits for Canadian Residents
Canadian residents can shop in the United States duty free as long as they are in the U.S. for more than 24 hours. If you're in the U.S. for less than 24 hours, none of your purchases are duty free and you'll need to pay a tax on the goods. For stays that range from more than 24 to less than 48 hours, you can bring back CA$200 worth of goods duty free. Alcohol and tobacco purchases are not included in the CA$200. The duty-free exemption bumps up to CA$800 for stays of 48 hours or more. In this case, limited quantities of alcohol and tobacco may be included in the CA$800. Canadian residents living in the same house may not combine their exemption limits.
Limits for U.S. Residents
If you're a U.S. resident visiting Canada for less than 48 hours, you can bring back $200 worth of goods duty-free. For stays longer than 48 hours, the duty-free limit rises to $800, but this $800 limit can only be used once every 30 days. If you return for another shopping trip in less than 30 days and have already purchased $800 worth of goods, your limit drops to $200. People who live in the same house can combine their duty-free limits, but they must travel together.
Alcohol & Tobacco Rules for Crossing the Border
For Canadian residents staying in the U.S. less than 48 hours, all alcohol and tobacco brought back will be taxed. For stays longer than 48 hours, Canadians can bring back either 1.5 liters of wine, a total of 1.14 liters of liquor and wine or 8.5 liters of beer duty-free. They may also bring back either 200 cigarettes, 50 cigars or 200 grams of tobacco. If the value of the tobacco and alcohol exceeds the $800 duty-free limit, you must pay tax on your purchases. U.S. residents can bring back 1 liter of alcohol duty-free on their return from Canada. They may also bring back 200 cigarettes or 100 cigars as long as the cigars are not from Cuba. To bring alcohol into the U.S., you must be 21 years or older. In most cases, Canadian and U.S. residents can bring back more than these amounts, but the excess will be taxed.
Duty Free, Not Tax Free
If you pop into a duty-free shop thinking you can purchase anything you like tax free, think again. "Duty free" means the items in the shop have not been taxed by the country the shop is in. If your purchases from the duty-free shop exceed your monetary, alcohol or tobacco duty-free limit, you will have to pay your home country's tax on the items. Keep in mind that duty-free purchases are intended for use outside of the country the shop is in. For example, if you purchase liquor at a Canadian duty-free shop, you must wait until you are in the U.S. to have a drink.
For a purchase to qualify for a duty-free exemption, it must be for your own use or for use within your household. Items purchased for commercial use or as a gift for someone outside of your household may be subject to taxation. If the value of your purchases exceeds the duty-free exemption, you may be taxed on the entire value of the purchase, not just on the amount that exceeds the limit.