Are items taxable?

TREASUREGALORE · Posts: 4

Hi there. I'm selling Bone China Teacups and Saucers and other porcelin and glassware. I live in Ontario, Canada. I was wondering if the items i'm selling are taxable? I haven't even made my first sale yet but wanted to know before I start. Is it true that if your just a small business that you don't have to charge tax? There is a button when i'm listing items that ask if the item i'm selling is taxable.

Thanks for your help in advance

MoonwishesStore · moderator Posts: 17389

maggiethehousecat · Posts: 2457

Treasures Galore, if you live in Canada and ship outside Canada it is against the law to charge sales tax and GST. If you ship inside Canada you charge Ont. sales tax and GST on the item price only. Those taxes are automatically added to the postage when you mail.

If you are setting up a business and expect to earn quite a bit you will need a tax number to charge tax to Canadians. If you are just selling off your personal collection you would not need that and would not need to charge tax on used items. I do not because if I have 2 sales a year within Canada it is miraculous.

Shipping is high within Canada. It is less expensive for Canadian buyers to buy from the US than pay Canadian domestic postage for cups and saucers which require boxes.

You still have to declare the income on your tax return no matter where it is from.

kjscreations · Posts: 1727

here in the states.... it is TRUE you don't have to collect BUT you must pay it. And if you COLLECT it, you must have a tax license from your state.
And (so far) we collect & pay when something sells within our own state.
Soooooo.... if you don't want your in state sales tax to come out of your pocket, register for a sales tax licence - collect - pay.

Canada may be a Ho-nutha animal. Your taxing laws should be on a website.

tigercreekgifts · Posts: 6293

Actually, I read on my states small business website that we don't have to charge or collect sales tax if we make under $20,000 a year or get less than 200 sales (whichever one comes first). If we don't meet those quotas, our state just considers us to be having an online yard sale or selling as a hobby every so often and in that case, they don't consider you to be an official business and you don't have to charge tax or get a business license.

The payment services like GCO and Paypal keep track of your sale profits and, if at the end of each year you have met or gone over your states sales limit, Paypal and GCO are required by law to send your profit information to the IRS for tax purposes. If you never meet that limit, I guess they don't send any of that info over to the IRS? They didn't specify what they do if you fall under those limits.

MoonwishesStore · moderator Posts: 17389

kjscreations · Posts: 1727

Yes... I believe that is income and irs stuff... not sales tax.

cosmicray · Posts: 7286

MoonwishesStore · moderator Posts: 17389

My problem with sales tax is it is being charged for when buying inventory from a certain place when in reality most sewing patterns in my state are tax exempt. Same as most clothes. Any clothing item that is necessary is tax exempt as well as patterns to make it, but things like formals are taxable as well as the patterns to make them. Once I learned that I had to adjust tax by categories via the global editor.

I've found that the easiest way to go through to see what I needed to report no tax paid for my state, is go through my Amazon receipts that you can do right on your account, as most of my on-line purchases are through them but they are also starting to collect sales tax.

TREASUREGALORE · Posts: 4

I have looked at quite a few forums on people selling stuff from Canada and shipping them to U.S and the consensus seems to be that no tax is charged when am item is bought by a U.S customer and shipped from Canada to U.S.

What i would like to know is. If this is indeed the case, that would mean that I would put no since tax is not applied to the product i'm selling?

This is what i'm trying to figure out since there is a section that asks if the item i sell is taxable. Below i put what ecrater is asking me if my item is taxable or not.

If "no" is selected then tax will not be applied to the product. If "yes" is selected (product is taxable), then the applicable taxes (set by you in the State Taxes section of the admin panel) will be applied to it.

cosmicray · Posts: 7286

The eCRATER system works like this ... for those items you check 'YES' for sales tax, it then looks to see if you have established a sales tax for the destination state. I don't know if Canada provinces have places to indicate a sales tax rate. If no percentage is entered in the destination state bucket, then no sales tax is charged.

For US orders (shipped from Canada) I think you are OK without charging sales tax. The issue becomes what to do about Canada orders shipped to Canada. I don't know the rules up there. Perhaps a Canada resident seller can comment on what is supposed to happen, and if the eCRATER system supports it or not.

TREASUREGALORE · Posts: 4

Alright, so for items shipped to U.S, i'll put not taxable, but i have been trying to find out for items to Canada (shipped from Canada) but have not been able to find a clear answer. Could any Canadian sellers please help me out with this issue? Thank you in advance.

MoonwishesStore · moderator Posts: 17389

Maggie the house cat is in Canada and did reply to you. You might want to reread her post.

TREASUREGALORE · Posts: 4

Alright, so for items shipped to U.S, i'll put not taxable, but i have been trying to find out for items to Canada (shipped from Canada) but have not been able to find a clear answer. Could any Canadian sellers please help me out with this issue? Thank you in advance.