Importance Of Harmonized Sales Tax And Buyer’s Premium

Equipment auctions are an excellent market channel to get the best value for heavy industrial machinery, machine tools or surplus equipment. Furthermore, it is also cost-effective for the buyer, as purchasing new equipment can be exponentially expensive. The standard procedure for an equipment auction requires bidders to bid on a particular lot, and the bidder with the highest bid wins. However, what transpires after the auction? Post-auction, the buyer has to pay certain additional fees and taxes on top of the hammer price. These include the Federal Harmonized Sales Tax and a Buyer’s Premium. These terminologies are explored in detail in this blog.

What Is Federal Harmonized Sales Tax?

In the context of auctions, Federal Harmonized Sales Tax (HST) ensures that the transaction is not only legal and transparent but also contributes to the government’s revenue. By harmonizing sales tax, auctions operate within a standardized framework, making it easier for buyers and sellers to navigate the financial aspects of their transactions. The main advantage of HST in auctions is its ability to streamline the taxation process. With a unified tax structure, both local and international buyers can better understand the financial implications of their purchases, fostering a sense of trust and reliability in the auction process.

What Is A Buyer’s Premium?

Buyer’s Premium is an additional percentage of the final bid price that is paid by the winning bidder on top of the hammer price. It serves an important role in sustaining the auction industry. 
The fee not only supports the operational costs of the auction house but also incentivizes them to continually improve and innovate to enhance the overall auction experience and maintain the integrity of the marketplace.

If you wish to purchase used surplus equipment or conduct an auction for your existing machinery, please reach out to us at Infinity Asset Solutions today. With decades of experience, our highly competent team of auctioneers will assist you in selling or purchasing industrial equipment. To learn more about our services and auction schedules, visit our website today!