charge taxes or take the hit to stay competitive?

[nostalgia4toys]

Hi there,

This is my first post on the forums. I have been selling on ebay since about 18 months now and I just hit that 30k sales in the past 12 months. Which means that I registered to get my GST number (and PST number from Quebec since I live there).

I did make a sales tax table according to the respective HST for all provinces registered to the harmonised tax, GST for the rest but Quebec which I need to charge GST + PST.

At this moment I am starting to edit my listings and a though comes to my head "...And if I am not competitive on prices anymore because of this... ?"

I need opinions here, should I charge tax on ebay or not? I keep reading on forums that "many" sellers either hide the tax in their price or just take the hit to "stay competitive". Is this vital?

From doing the math, lets say I charge 4000$ (with shipping) within a month. If I just take the hit, that is 500$ to 600$ in loss since the average tax charged will probably be around 13%. I know this doesnt count the tax credits I can get for everything related to my business. Still this seems like a big loss to me, plus most inventory I buy is either from kijiji or garage sales (where I dont pay taxes anyways).

I need some advice here.

Thanks a lot,

Gabriel

[vista--sell]

Hi Gabriel,

We asked ourselves the same questions many months ago before to launch and register our business both in Canada and Québec. We decided to follow the laws and to charge taxes to our customer. Of course, we received many complaints because there was a time we were selling without charging taxes (before to reach the 30k sales), but we explained to these customers and they understood...

The logic behind this decision is quite simple : To hide our sales activities would be very risky, so we do our duty, like all serious business and private individuals.

Unfortunately, it's impossible to recover taxes from individuals (Kijiji, garage sales) but don't forget you can save taxes when you are charged by a business for a good / service needed in your commercial activities (exemple: the taxes you pay to Canada Post to ship your goods).

Si tu as besoin d'autres informations, n'hésites pas à nous écrire ici ou en privé.

I wish you good luck in your decision and nice sales!

Gabriel

[vista--sell]

- - Sorry for double post, the first will be deleted soon - -

Hi Gabriel,
 
We asked ourselves the same questions many months ago before to launch and register our business both in Canada and Québec. We decided to follow the laws and to charge taxes to our customer. Of course, we received many complaints because there was a time we were selling without charging taxes (before to reach the 30k sales), but we explained to these customers and they understood...
 
The logic behind this decision is quite simple : To hide our sales activities would be very risky, so we do our duty, like all serious business and private individuals.
 
Unfortunately, it's impossible to recover taxes from individuals (Kijiji, garage sales) but don't forget you can save taxes when you are charged by a business for a good / service needed in your commercial activities (exemple: the taxes you pay to Canada Post to ship your goods).
 
Si tu as besoin d'autres informations, n'hésites pas à nous écrire ici ou en privé.
 
I wish you good luck in your decision and nice sales!
 
 
Gabriel

[reallynicestamps]

How much of your business is actually in QC, and requires the taxes to be charged?

How much is in the rest of Canada and do you only have to charge GST in those provinces? For example for a customer here in BC, I understand you only have to charge the GST of 5%.

When you spread the cost of Canadian sales taxes over all your sales and subtract the tax credits, how does it work out for you?

Obviously, I would not expect you to post any exact number on a public board, but those are the questions that you may not have thought of.

And congratulations on reaching the point of paying taxes so quickly!

[cal-ectibles]

Your question isn't about hiding the tax, it's about eating it. That's what I do, just suck it up. I sell half my stuff to the USA so you don't charge taxes on those out of country sales anyway. And since I'm in BC and I very rarely sell anything in province I only have to pay the GST to the rest of Canada. I think I'm doing it right in that respect, although I find myself paying PST to sellers in other provinces way too often. Tax is always confusing, so for what it's worth I'd rather not frustrate my customers and just eat it.

Cal-ectibles.

[nostalgia4toys]

thank you for your comment. I decided to charge taxes and at my surprise, I still get sales 🙂 My guess is I will lose about 15 of my sales, though I will compensate with tax credits for so much stuff that I think it will end up making no difference but me being legal.