There are two different types of taxes on a trip. One is the government, airport, and various types of taxes associated with travel and the other is income taxes. In this case, Dave emailed me asking about the travel taxes.
DAVE: I recently won a trip contest in Canada. I only learned after I have to pay the taxes, which are pretty hefty. Over $600. I am thinking of declining the prize.
CAROLYN: You have to always read the full official rules. Many Canadian trip contests expect you to pay the travel taxes as the sponsor is only donating the vacation, not paying any of the government fees. (NOTE: This is different from the American income tax on prizes. These taxes are HST, airport taxes, etc.) If you had to buy the trip, you would have had to pay for the trip and all the same taxes. Remember, ALL travel wins are cheap vacations, not free vacations, as you would also need spending money for sightseeing, souvenirs, many times meals, tips, excursions, etc. AND I would take it!!
DAVE: Yes, I just got confirmation that my Canadian vacation trip win with Canjet does not include taxes, and they will be about $600 to $700. I will still take the trip because it’s a cheap trip. I was hoping the tax would be much less, of course, but oh well.
CAROLYN: I thought this was an important topic to blog about, as many people expect everything to be free when they win a prize. That is not always the case. It’s a matter of knowing how to read the Official Rules to know what the sponsor is responsible for and what you are responsible for.
I couldn’t get a cached version of the Canjet contest rules, as they were embedded in the original contest page. However, this clause is in almost every set of vacation contest rules I read:
Ground transfers to and from the winner and/or travelling companion’s residence and designated airport and all other expenses not specified herein or listed within the travel brochure, including but not limited to telephone, gratuities, optional tours, taxes, and fees, insurance, medical travel documents, personal expenses, and any other costs not specifically stated herein as being included, are the sole responsibility of the winner and his/her travelling companion.
We have had to pay taxes on several of the trips we have won. Sometimes, even if the clause is in the rules, the sponsor may not request payment of any kind. I always let them ask me, and only if they do, I happily pay it.
DAVE: I forgot to ask if I could take the cash value of the prize, but I suspect the answer is no in any case.
CAROLYN: You are right, Dave. The answer would have been no because this clause is also in most rules.
No extensions will be permitted, and the Prize cannot be exchanged, transferred, or substituted for cash except that the travel company/sponsor reserves the right to offer a comparable product in the event of a vacation package cancellation, Act of God, or other unforeseen circumstances. The Prize winners shall not be entitled to receive, in cash, certificate, or otherwise, the balance of any amount representing the difference between the Prize retail value and actual cost. No frequent flyer miles will be available.
That said, ask anyway, because again, it is up to their discretion.
How I read the rules is: I skim them when entering and read them in full when I win. (NOTE: Skimming the rules can sometimes be a problem. Once, I ended up in a sumo wrestling suit!)
Would you pay the taxes on a trip win?