Ontario’s position on PST and out-of-province vendors is similar although the definition of “business presence” may serve as a loophole. Ontario RST Guide 202 “Goods Brought Into Ontario” says:
“Out-of-province suppliers who have a “presence” in Ontario and who sell taxable goods or provide taxable services to customers in Ontario are required to obtain a Vendor Permit to collect RST. Businesses who do not have a “presence” in Ontario, but who make sales of taxable goods and services to customers in Ontario may voluntarily register with the Branch for the collection of RST. When determining if a business has a “presence” in Ontario, the Branch considers factors such as, the existence of a branch office, warehouse or storage facilities, a post office box, employees, agents, etc., in Ontario.”
Note that if you, the vendor, do not charge and collect RST, the responsibility falls onto the purchaser:
“If taxable goods and services are purchased for own use from an out-of-province vendor or supplier who does not charge and collect RST, the purchaser is required to report and pay the applicable RST on the total fair value” (Ibid.).
So if you are an out-of-province vendor selling goods or services through a Web site and shipping them to customers in Ontario, you must charge those customers RST if you have a business presence in the province. If not, the province suggests it would be nice if you would charge and collect the RST anyhow.
Saskatchewan, like B.C., takes a hard line view. The answer to the question, “I am a non-resident vendor making sales into the Province. Do I have to collect tax on my sales?” is:
"All persons making taxable sales in Saskatchewan should become licensed and collect the tax. Non-resident businesses should consider becoming licensed as a convenience to their customers. If non-resident businesses don't collect PST at the time of sale, their customers are required to self assess and remit the tax" (Saskatchewan Finance Provincial Sales Tax Common Questions).
The rules in Manitoba are very similar to those in B.C. (See Bulletin 004: Information for Vendors). Once again, if you meet these four requirements, you are required to register as a vendor and collect and remit Manitoba’s PST.
The government of Quebec appears to assume that out-of-province vendors will register and collect and remit sales tax. There is a reference in the Quebec Retail Sales Act to out-of-province businesses registering before selling taxable goods to Quebec residents (and once again, if the vendor has not collected the Quebec Sales Tax, purchasers are expected to report and remit the tax).
Although the government of Prince Edward Island “encourages” out-of-province vendors to register, collect and remit the province’s PST there is no legislation requiring out-of-province vendors to register. The province’s Revenue Act puts the onus for remitting the Revenue Tax on the purchasers.
“If you are an individual or business who purchases taxable goods in another province or country for consumption or use in Prince Edward Island, you are responsible for the payment of Prince Edward Island revenue tax (PST) on your purchases” (Tax and Land Information).
Online Sales: Which Taxes Do You Collect for Each Province?
In sum, as an online retailer accepting and shipping orders across Canada, the list of taxes you should be collecting and remitting currently looks like this:
- BC – GST & PST
- Alberta – GST
- Saskatchewan – GST & PST voluntarily (unless is home province)
- Manitoba – GST & PST
- Ontario – GST & RST if have a “business presence” (unless is home province)
- Quebec – QST
- New Brunswick – HST
- Nova Scotia – HST
- Newfoundland & Labrador – HST
- Prince Edward Island – GST & PST voluntarily (unless is home province)
- Northwest Territories – GST
- Nunavut – GST
- Yukon – GST
(*In your home province, registration for PST/RST is mandatory if you are selling taxable goods and/or services.)
This means that you should register as a Provincial Sales Tax Vendor with each of the provinces you will be doing business with and will be expected to collect and remit the sales tax accordingly.
What can you do to get around all this additional paperwork and bookkeeping? Not much. Some Canadian-based online businesses limit the areas they ship to. An Ontario based business, for instance, might only accept orders from and ship to customers in Ontario. Others only sell non-taxable goods and/or services.
The picture is further complicated by the fact that goods and/or services that may be tax-exempt in one province may be treated differently in another. So take all the information above as a guide only and be sure to check with the finance/revenue ministries of the individual provinces to be sure whether or not you have to collect and remit provincial tax when you are shipping to customers who reside there. When it comes to taxes, you can’t afford to be wrong.
