I have seen this question come up more often now that Amazon.ca is offering a marketplace tax collection service now.  What exactly is that?  In the past, if a seller wasn’t registered for GST/HST or various provincial sales taxes, Amazon would not charge it on the sale.  So customers would potentially benefit a bit by not having to pay sales tax.  This loophole however meant that the Canadian governments were not collecting the sales taxes on these transactions.   So the governments made it a law that the marketplace operators like Amazon would be responsible if their sellers would not.  Now if you are not registered for the various sales taxes Amazon will collect it on your sales and give it to the government.  This does not mean you are off the hook.  The CRA and various provinces with stand-alone sales taxes have their own requirements for sellers to register.  You should check with the provinces you live in.  I generally recommend registering for GST/HST right away when you start.  That way you will collect any GST/HST on the sales of your items, but you will also be able to claim back any GST/HST paid on goods for your business.  That includes items for resale so if you are not factoring in sales tax into your buy costs, then that would lower your cost of goods sold.  You still have to pay but you can claim the sales taxes back when you file.

The big caution is once you register, you must correctly update your Amazon sales tax number in Seller Central.  This includes making sure the correct default codes are set up.  If not, Amazon won’t pass on the GST/HST collected on the sales and CRA will say you are still on the hook for those funds.  Please make sure you have done this correctly.  If you are not sure, join our free course and download the PDF cheat sheet where I walk through the setup.  I have seen too many sellers do this wrong and it is an expensive mistake. CRA isn’t very forgiving when it comes to sales tax collections.  And you know you are not going to be able to go back to Amazon and say “hey can you give me the GST I should have collected?”.

If you want to file your own GST/HST returns, I put together a course for those who want to do it themselves.