If you were to run an internet business that "sells" products all over Canada and certain States, how do you work out the taxes? Do you just charge the Provincial tax of where your business is located? or do you have to individually work out the taxes for each Province and State that you are offering your services to?
Any help is greatly appreciated. Thank you in advance.
Dave
Asked almost 3 years ago in Unknown
Categories:
Tax
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 Ontario lawyer
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When a business sells goods over the Internet and some of the customers are located in Canada (they provide a Canadian ship to address), the question that must be answered by the seller for Canadian federal goods and services tax (GST) registration purposes is: Are you carrying on business in Canada. If you are carrying on business in Canada (rather than carrying on business with Canadians), you must register and charge, collect and remit GST (if your total worldwide sales (not just to Canada) is greater than $CDN 30,000). If you are making deliveries F.O.B .Canada, you may be considered to be carrying on business in Canada. If you are not carrying on business in Canada, you do not need to register and you do not have to collect GST. If you do not collect GST, then the customer will pay GST at the Canadian border on the value for duty (usually Fedex or the courier company clears the goods and charges the duty and a fee).
With respect to provincial sales taxes, the rules are different on a province-by-province basis. Nova Scotia, New Brunswick and Newfoundland/Labrador have harmonized their provincial sales tax with the GST and call it HST. HST is imposed under the GST legislation (the Excise Tax Act). The rules are the same as above. If you are registered for GST, you would collect HST on sales into the HST provinces.
With respect to Quebec, Quebec has a provincial statute that is similar to the GST Legislation. If you are carrying on business in Quebec, you must register for Quebec sales tax purposes and charge, collect and remit QST. If you deliver F.O.B Quebec, you generally are required to register. If you cause the shipment to go to Quebec, they sometimes take the position that delivery is F.O.B Quebec.
Ontario and British Columbia have announced that they will harmonize their provincial sales taxes with the GST on July 1, 2010. As a result, the rules will be changing. Generally the current rules are that you must register for Ontario retail sales tax purposes and British Columbia social services tax purposes if you carry on business in the province.
Posted over 2 years ago
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Comment from Milton, Ontario
http://www.irs.gov/businesses/small/article/0,,id=99021,00.html
This is a link to all 50 us states tax offices Some require sales tax some do not. Browse on it a bit. The US has federal and state tax rules. I would go to www.irs.gov as well and www.sba.gov the small bis admin who may be able to help direct you.
Posted about 2 years ago
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