Question and Answers

Questions and Answers – Selling outside of BC

Published On May 7, 2013 | By Joseph (Ken) | Q&A
Question: I was reading an article about a new US law that will force out of state retailers to collect sales tax when selling to the 46 states that charge sales tax.  I sell my products online to people in other provinces in Canada – do I have to collect sales tax?

Answer: Yes. Online businesses are treated, for tax purposes, the same as offline (“bricks and mortar”) businesses. As a rule, you charge the sales tax rate specific to the province that the product is shipped to. You then have to remit the sales tax you collected to the applicable government body. The good news is that, although tax rates vary from province to province, a majority of provinces have the Harmonized Sales Tax, which means whatever tax you collect you remit to the federal government on the GST return you already file.Here are the specifics per province as of April 1, 2013:

  • BC – GST 5% and 7% PST 
  • Alberta – GST 5%
  • Saskatchewan – GST 5% and PST 5% 
  • Manitoba – GST 5% and PST 7%
  • Ontario – HST – 13%
  • Quebec – GST 5% and QST (Quebec Sales Tax) 9.975% 
  • New Brunswick – HST 13%
  • Nova Scotia – HST 15%
  • Newfoundland & Labrador – HST 13%
  • Prince Edward Island – HST 14% 
  • Northwest Territories – GST 5%
  • Nunavut – GST 5%
  • Yukon – GST 5%

As you can see, in most cases (all but BC, Saskatchewan, Manitoba and Quebec), you remit tax solely to the federal government (GST/HST). Therefore, you can decide to either: 1) Not ship products to those four provinces 2) Registered in those provinces as a “provincial sales tax vendor” and remit whatever you collect following the rules specific to that province.

As a last point, you do not charge GST on taxable goods and/or services shipped to people in other countries, such as the US.  

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About The Author

Joseph (Ken)
(Ken) is a Registered Public Accountant with over 25 years of public practice experience in the accounting profession. Ken specializes in accounting information systems, taxation and financial reporting.

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