"eBay provides nothing"
eBay is only a venue where you advertise the products you want to sell.
If you advertise in a newspaper classified columns, or a magazine or on radio or wherever or sell through a flea market etc... you should not expect your advertising/marketing venues to provide you with tax information as they have no way of knowing how much profit you made. The same applies to eBay. They do not know your cost so cannot estimate your profit.
When thinking about taxes and selling online, there are two ways to look at it.
1) You are selling used personal property with no goal to generate a profit. In such instances, you do NOT need to report sales to CRA unless your worldwide annual sales exceed $30,000 (you need to register for HST/GST) or an item (or group of items) is sold for more than $1,000 (may be subject to capital gain on sale of personal property).
2) You purchase goods for resale at a profit. In such instances, you need to report the total sales and net profit on your tax return. Only the net profit is added to your other income.
As always, I recommend you discuss the subject with a competent accountant familiar with your personal circumstances and - preferably - experienced in mail order to help you determine your tax liability if any.
Being a "registered business" or not is irrelevant to the tax department (unless revenues exceed $30,000).
Based on the fact you are only selling "stuff" you had purchased for personal use, I would most likely advise to ignore the tax liability BUT I suggest you let the accountant knowledgeable of your personal circumstances make that decision.
"I made something about $3000 last year"
??? You did not "make" $3,000. In that context "make" would suggest a profit. You have sold $3,000 worth of "stuff". If your original cost was in that general neigbourhood, forget about taxes.
Good Luck.
PS - If you were in the business of purchasing goods for resale, you could use the following sample P&L to help prepare your taxes:
http://www.pierrelebel.com/lists/P&L-sample.htm
Taxes ? Which one?
Income tax : Net profit must be reported, regardless of amount - no minimum. If you net $500 from your sales on eBay (sales minus costs minus related expenses), $500 must be reported as business income and added to your other income
GST/HST : A seller must register with GST/HST once annual worldwide revenues (including shipping charges) reach Cdn$ 30,000
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/glssry-eng.html#registrant
That is correct.
Sales do include shipping and handling charges.
"I purchase 99.9% of the goods I sell from garage sales. Obviously there is no documentation when you buy at a garage sale"
You can, in fact you should, make your own documentation if the amounts are relevant.
Let's say you spend $5.00 at a garage sale and sell the stuff for $100.00, your gross profit is $95.00. If you cannot demonstrate that your cost was $5.00, CRA will look at your gross profit as $100.00, In this case, no big deal.
However, if you claim to have spent $2,000 buying at garage sales, you need to prove the provenance of that money (withdrawn from bank account, etc...)
The best thing to do when no receipt or invoice is provided is to maintain a "purchase journal" listing the date, where purchased, what purchased and the amount paid".
CRA will accept the journal IF everything else you do is reasonable.
For example, CRA will NOT accept anyone claiming to have spent $50,000 in garage sales purchases, sold the same stuff for $55,000 for a gross profit of only $5,000 unless verifiable evidence is provided on the source of funds (withdrawal of $1,000 cash from the bank every week - for example).
"If I were to start an eBay store and begin declaring this as income"
Begin ?
You do not need to have a store on eBay to report your income. ALL net income generated by purchasing and reselling "stuff" at a profit is fully taxable, regardless of the amounts involved. No minimum.
For example, if a Canadian sold $5,000 worth of "stuff" on eBay during the year and his cost was $2,000 (purchased at garage sales or anywhere, it does not matter as long as he can prove his costs), that leaves a gross profit of $3,000. From that amount a seller can deduct related expenses (eBay/PayPal fees for example) leaving a net profit of $2,000.
That $2,000 must be included on the annual tax return on line 135 and added to other income to arrive at total income. (the $5,000 sales is to be shown at line 162 but is not included in the income calculation).
Back in 2004 and 2005, CRA asked eBay for transaction information on PowerSellers (minimum $3,000 sales a year). That PowerSeller requirement is no longer required by CRA. They ask whenever they feel like it.
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