Retail and distribution businesses carry stock, sell to customers in many provinces and increasingly sell through online marketplaces. The tax questions are about what the stock is worth at year-end and how much sales tax applies to each sale.
The points where tax and accounting rules come into play are numbered.
Numbered points are explained below.
At: Sell online or in store
Selling through several channels makes it easy to miss GST/HST, or to collect it twice. Since July 2021, operators of distribution platforms may have to collect GST/HST on sales by vendors who are not registered, so a registered seller needs to know who is collecting the tax on each channel.
We map each channel and reconcile what was collected to your return.
At: Collect sales tax
Charging your own province’s rate on every order means some customers pay the wrong tax, and you may owe the difference. Goods are generally supplied in the province where they are delivered, so the rate depends on where the customer receives them: an Ontario seller shipping to Nova Scotia charges Nova Scotia’s HST rate.
We check that your sales system applies the rate by delivery province and that your returns match.
At: Returns and year-end
The value of your stock at year-end changes your profit, and so your tax. For tax, inventory is valued either item by item at the lower of cost and fair market value, or all at fair market value, and whichever method you choose must be used consistently each year.
We apply your method at each year-end and raise any change with you before the return, not on it.
Sales by channel, inventory and GST/HST by province need to be recorded and reconciled every month.
Year-end inventory values and GST/HST returns feed the corporate return.
Stock levels, margins by product and seasonal cash flow drive purchasing decisions.
Selling to US customers at volume often leads to US registrations and a US entity.
Generally the rate of the province where the goods are delivered to the customer.
The method must be used consistently from year to year. A change should be discussed before year-end, not made on the return.