Tax Question - Individual Seller Account
I have just created an Individual Seller account on Seller Central and am new to Amazon. I do not anticipate selling more than 20-30 items per month, however do plan on using FBA to fulfill the orders. If my orders were to exceed that per month I would more over to a Professional account. Are there any tax implications that I need to be setting up at this time in order to charge tax? I live in Ontario and suspect my sales will be well under $30,000 per year. My understanding is that I do not need to charge GST/HST if my annual sales are under $30,000 and am based in ON. If Amazon requests that I ship any of my items to the BC warehouse, do I then need to charge PST? Just a bit confused about the process at the moment. Thanks in advance.
Tax Question - Individual Seller Account
I have just created an Individual Seller account on Seller Central and am new to Amazon. I do not anticipate selling more than 20-30 items per month, however do plan on using FBA to fulfill the orders. If my orders were to exceed that per month I would more over to a Professional account. Are there any tax implications that I need to be setting up at this time in order to charge tax? I live in Ontario and suspect my sales will be well under $30,000 per year. My understanding is that I do not need to charge GST/HST if my annual sales are under $30,000 and am based in ON. If Amazon requests that I ship any of my items to the BC warehouse, do I then need to charge PST? Just a bit confused about the process at the moment. Thanks in advance.
4 replies
Seller_X9AxWaXfNnGAl
Based on current rules, you would not be required to register for GST/HST. However, you will not be able to claim GST/HST related payments. That includes for FBA. You would be paying 13% on all of your FBA fees paid for use of Ontario warehouses and 5% on all FBA fees for BC or Alberta warehouses. That is addition to all other expenses that you currently or will pay on products or services purchased. That will add at least 10% to your costs that you won’t recover other than just increasing your prices and that could put you at a competitive disadvantage. Even though the customers might be paying the same or even less when Amazon adds GST/HST to their orders, the pricing for Buy Box and purchase decisions will not take that into account. You should also be aware that you need to have a Professional account to qualify for the Buy Box and to have sales tax added to your orders. Regarding a BC PST decision, it is still a little ambiguous. BC amounts to over 10% of the population and sales (for myself at least). The FBA nexus concern is split among multiple opinions. I do know that I am not (yet) paying Amazon for any BC PST for FBA fees, but that could change at any time.
I suggest that you don’t just let things happen and then react. You need to play. One consideration is when you register. GST/HST will expect your filing based on the date you sign up and set your fiscal year date. PST will expect quarterly filings based on the effective date your assign. Also be aware that the requirements for Quebec are aligned with GST/HST, so you will need to consider registering for QST when your annual sales (worldwide) reach $30K.
Amazon’s tax settings take a few days to take effect, so you are best off to get that started in advance of your effective date.
The Buy Box eligibility also takes a few months before you can become eligible. Prior to that time, customer decisions will be based on what they can see about your account (price vs rating), but BuyBox based purchases will ignore your offer during that time.
In the mean time, you should at least watch your sales month by month to see if you starting to get over $2500 in monthly sales on a regular basis. You could do the same by province for BC and Quebec.
Dave
