# Selling online- Sales Tax? my tax or theirs?



## Sportschirps.com (Dec 9, 2008)

Hi Guys,

Need some help here. I am from Canada and selling t-shirts online. If I send a t-shirt to say Colorado from Ontario Canada. Do I charge the tax in Colorado or in Ontario?

Also What about tax free states? Pennsylvania? No tax for them? Really need to figure this out as I have read multiple answers. Thanks so much

Scott


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## greyhorsewoman (Jul 19, 2007)

A good rule of thumb is that you can ONLY collect tax where *you *hold a sales tax license. So, if you reside in and have a sales tax license for Ontario, then any sales made in Ontario would be subject to applicable tax.

You cannot collect tax where you have no authority to collect tax (meaning you need to have a sales tax license so you can submit any tax collected).


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## missswissinc (Feb 21, 2012)

I agree with grey. I have to collect only sales tax on clothing items shipped or customer pickup in my state. If I sell to a client in PA or NJ then they are exempt from the NY sales tax. I would suggest sitting down with a cpa and telling them that you want to make sure your collecting the proper sales tax for your area if you sell to a client in your area. cant stress you don't want to screw with the tax man since they always win.


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## royster13 (Aug 14, 2007)

Sportschirps.com said:


> Hi Guys,
> 
> Need some help here. I am from Canada and selling t-shirts online. If I send a t-shirt to say Colorado from Ontario Canada. Do I charge the tax in Colorado or in Ontario?
> 
> ...


You do not have to worry about collecting tax for sales to the US.....However, for each province in Canada you will have to collect GST or HST as applicable.....This will only apply if you have enough sales to be required to be registered for GST....Currently if your sales are under 30,000 per year you do not need to register....

This link will give you some important information......
Goods and services tax/harmonized sales tax (GST/HST)


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## royster13 (Aug 14, 2007)

The 2 posts above are very wrong based on our tax system in Canada.....No matter where you are located in Canada, you have to collect tax for every province.....In some provinces it is just the "Goods and Service Tax" but in other provinces it is the "Harmonized Sales Tax"...


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## Sportschirps.com (Dec 9, 2008)

Thanks so much for the help. So if my sales were under $30,000 I dont have to pay tax? but above I have to submit? sorry kind of new to this and ended up selling a ton of shirts. Lots to the USA. So I guess my real questions is if my sales to Canada were under 30K I dont need to register?


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## missswissinc (Feb 21, 2012)

like I said in my post talk to a cpa about what taxes you need to collect and how much. This way you not shorting yourself or the govt and the govt doesn't like compition.


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## GraphicsFactory (Jul 17, 2007)

As a rule of thumb, you are only required to collect taxes for goods sold within your taxing area/region/district. For example, I must collect sales tax on goods sold in my state. However, if I moved my business a few miles away to another town, I would also need to collect a city sales tax. However, if I make a sale to someone in another sate that I have not established business, there is no sales tax to collect. Canadian laws are probably different. But, in any case you do not collect a sales tax for a state in the US. Check with an accountant knowledgeable in Canadian laws for your responsibilities.


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## bshop84 (Aug 2, 2012)

Here's the lowdown from the Canadian Government: Guide to charging and collecting sales tax - Canada Business Network

Generally, it goes like this: If you make under $30,000 you do not have to register for GST/HST (in other words you do not have to collect sales tax). Once you register for GST/HST you must charge tax in all provinces. This is where it gets a bit technical. Each province has a different tax structure. Most provinces have a Harmonized Sales Tax - Goods and Services Tax (GST) combined with Provincial Sales Tax (PST) to create a Harmonized Sales tax (HST). If the order comes from a province that uses HST, you must use their HST rate. If the order comes from a province that doesn't use HST, you must use only their GST rate (which is always 5%). Manitoba and Quebec have their own quirks as well. Technically speaking, the purchaser is supposed to remit their PST amount that you didn't charge and file that on their tax returns (but in all reality this almost never happens).

In short, you always collect HST. If the purchaser's province doesn't have HST you only collect GST. You also must collect PST in any province you are registered in. Since you are in Ontario, you don't have to worry about that (Ontario has a 13% HST that you will collect on orders originating from Ontario). You can also register in more than one province and collect the PST from other provinces as well, but it is not necessary.

I'm rambling back and forth, sorry  Read the article I posted above for more clarity.

As far as orders from the states, I have no idea. I've been trying to figure that out all week, as I am in the exact same situation (hence how I stumbled across this thread). From what I've gathered you don't charge any sales tax, but the customer does have to pay a duty when the package crosses the border. But I could be wrong.


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## chishirt (Apr 11, 2013)

I live in new york and own an online t-shirt printing service/ sell graphic t-shirts too.
Do I need to get a sales tax licence and tax my customers? I don't make close to 30K yet.
Thanks in advance for your feedback.


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## charles95405 (Feb 1, 2007)

The 30K threshold is for Canada.....not NY. IN CA we collect sales tax on goods delivered to someone/some place WITHIN CA, regardless of how little your sales volume is


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## sben763 (May 17, 2009)

In the US you must follow your states tax laws. As of now anything you ship out of state no mater what state you have your business in as long as its shipped out of your states business address then no sales tax is collected. 

Any thing sold within your state no mater how much you sell you need to collect any tax required by your state. If you aren't registered with you state and aren't collecting sales tax or are collecting sales tax but aren't registered you are facing some stiff fines by most states.


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## Annakiah (Feb 12, 2013)

Well the thread was necro'd but since new advice is being offered and bringing this up in the view, I'll add my two cents.

While really close, even this latest advice is not 100% accurate. Don't see tax advice from an internet forum. Seek it from the qualified tax specialist who's going to back you up when you get audited.


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## Printavo (Oct 7, 2007)

Yeah, you'll want to consult with a local CPA as well to be sure. Not a good idea to mess with the authorities & taxes


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